# In the matter of Tulsi Extrusion Ltd. MA 3635/2019 In C.P (IB)-3171(MB)-2018

> NCLT judgment dated 2020-03-02. Citation: TCN-2020-NCLT-01732. The case involves an application (MA-3635/2019) filed by the Resolution Professional (RP) of…

- **Court:** NCLT
- **Order date:** 2 Mar 2020
- **Citation:** TCN-2020-NCLT-01732
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tulsi-extrusion-ltd-ma-36352019-in-cp-ib-3171mb-2018-5598b985

## Summary

### Background

The case involves an application (MA-3635/2019) filed by the Resolution Professional (RP) of Tulsi Extrusion Limited seeking payment by Allahabad Bank, a financial creditor and member of the Committee of Creditors (CoC), to cover Corporate Insolvency Resolution Process (CIRP) expenses. The principal sum of Rs. 5,43,994/- minus TDS was paid by Demand Draft dated 21.01.2020. The bench considered the matter and directed Allahabad Bank to pay interest at 12% p.a. on that amount within one week from 20.02.2020. Subsequently, Allahabad Bank's counsel handed over Demand Draft No. 071037 dated 25.02.2020 for Rs. 48,959 in favor of the RP. The court had ordered the liquidation of the Corporate Debtor vide order dated 20.02.2020 in MA-3576/2019 in C.P. (IB) 3171/2018. Mr. Amit

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## Facts

Punjab National Bank initiated insolvency proceedings against Tulsi Extrusions Ltd. Allahabad Bank, a financial creditor, was directed to pay CIRP expenses to the RP of Tulsi Extrusion Limited. The principal amount of Rs. 5,43,994/- minus TDS was already paid via demand draft dated 21.01.2020. The court ordered Allahabad Bank to pay interest at 12% p.a. on the outstanding amount. Allahabad Bank subsequently provided a demand draft for Rs. 48,959. The court had previously ordered the liquidation of Tulsi Extrusion Limited on 20.02.2020. Mr. Amit C. Poddar, the erstwhile RP, consented to act as the liquidator. The relevance of these facts lies in the fulfillment of financial obligations during the CIRP and liquidation process, as well as the formal appointment of a

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## Issues and analysis

### Issue 1: Whether Allahabad Bank should pay the outstanding CIRP expenses to the Resolution Professional of …

**Ratio:** Financial creditors are responsible for covering CIRP expenses as per the Insolvency and

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**Reasoning:** The court considered the application filed by the RP seeking payment of CIRP expenses by

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**Interpretation:** This interprets the IBC provisions regarding the responsibility of financial

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**Application:** Allahabad Bank, being a financial creditor, was obligated to pay the CIRP

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## Parties

- **Judges:** SHRI. RAJASEKHAR…; RavikumarDu…
- **Appellants:** Punjab National…
- **Respondents:** Tulsi Extrusions…

## Timeline

- **2020-01-21 — Demand Draft for…**: The principal sum of Rs. 5,43,994/-…
- **2020-02-20 — Liquidation…**: The Court ordered the liquidation of the Corporate Debtor in MA-3576/2019 in C.P. (IB)…

## 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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