# In the matter of Topworth Steel and Power Ltd. IA-1008-2020 in (IB)-590-2018

> NCLT judgment dated 2020-06-10. Citation: TCN-2020-NCLT-01201. The application IA-1008/2020 was filed by the suspended board of directors against the Interim…

- **Court:** NCLT
- **Order date:** 10 Jun 2020
- **Citation:** TCN-2020-NCLT-01201
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/topworth-steel-and-power-ltd-ia-1008-2020-in-ib-590-2018-317c404c

## Summary

### Background

The application IA-1008/2020 was filed by the suspended board of directors against the Interim Resolution Professional (IRP). The IRP had issued an advertisement on 2020-05-24 to assign the corporate debtor's functioning on a job basis without obtaining approval from the Committee of Creditors (CoC). The advertisement also mentioned disciplinary proceedings initiated against the IRP before the IBBI, where a warning was issued to the IRP to remain conscious in the future.

## Facts

The suspended board of directors filed an application against the IRP. The IRP issued an advertisement on 2020-05-24 to assign the corporate debtor's functioning on a job basis without CoC approval. The advertisement mentioned disciplinary proceedings against the IRP before the IBBI. The SBI counsel requested to postpone the CoC meeting scheduled for 2020-06-11. The court directed the IRP to hold the CoC meeting on 2020-06-15 and present the proposal for assignment of work on a job basis. The IRP was directed not to take any action based on the advertisement until the CoC meeting.

## Issues and analysis

### Issue 1: Whether the IRP can issue an advertisement to assign the corporate debtor's functioning on a job …

**Ratio:** The IRP is required to act in accordance with the provisions of the Insolvency and

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**Reasoning:** The court noted that the IRP had issued an advertisement without obtaining approval from

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**Interpretation:** The IBC mandates that the IRP must consult with and obtain approval from the

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**Application:** In this case, the IRP's action of issuing an advertisement without CoC approval

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## Parties

- **Judges:** SH. B.S.V.…
- **Appellants:** State Bank of…
- **Respondents:** Topworth Steels…
- **Advocates:** Eshna K…; Santosh K…; +6 more

## Timeline

- **2020-05-24 — Advertisement…**: IRP gave an advertisement to assign corporate debtor functioning on job basis without CoC…
- **2020-06-10 — Order Del…**: Order delivered by the NCLT regarding the application filed by the suspended board of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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