# In the matter of Adig Jemtex Pvt. Ltd. CP No. (IB)-01-9-JPR-2021

> NCLT judgment dated 2023-03-27. Citation: TCN-2023-NCLT-04044. The case involves an application (IA No. 223/JPR/2022) filed seeking direction to the Bank of…

- **Court:** NCLT
- **Order date:** 27 Mar 2023
- **Citation:** TCN-2023-NCLT-04044
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/adig-jemtex-pvt-ltd-cp-no-ib-01-9-jpr-2021-d12a4689

## Summary

### Background

The case involves an application (IA No. 223/JPR/2022) filed seeking direction to the Bank of Baroda for crediting a subsidy amount of Rs. 88,66,432/- to the Corporate Debtor's account, which was allegedly illegally appropriated after the initiation of the Corporate Insolvency Resolution Process (CIRP). The CIRP was initiated against the Corporate Debtor following a petition filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code (IBC), which was admitted by the Tribunal on 17.06.2021. An Interim Resolution Professional (IRP), Mr. Rishabh Chand Lodha, was appointed. Subsequently, an application was filed by the Financial Creditor to replace the IRP with a Resolution Professional (RP), which the Tribunal allowed on 05.08.2021, appointing

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## Facts

On 17.06.2021, the NCLT admitted a petition under Section 9 of the IBC filed by an Operational Creditor against Adig Jemtex Pvt. Ltd., initiating CIRP. Prior to this, on 11.06.2021, Adig Jemtex Pvt. Ltd. received Rs. 88,66,432/- as a subsidy in its Cash Credit Account. The Bank of Baroda (BoB) subsequently adjusted this subsidy amount, leading to the filing of IA No. 223/JPR/2022, seeking a direction for BoB to credit the amount back to the Corporate Debtor's account. The IRP raised concerns about the appropriation of the subsidy during the moratorium period in a COC meeting on 17.07.2021. BoB argued that the amount was received before the CIRP initiation. An application under Section 12A of the IBC was filed for withdrawal of the CIRP, which was approved by the CoC

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## Issues and analysis

### Issue 1: Whether the Bank of Baroda was justified in adjusting the subsidy amount of Rs. 88,66,432/- after …

**Ratio:** Section 14 of the IBC imposes a moratorium that prohibits any action to recover, enforce

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**Reasoning:** The Tribunal considered the arguments presented by both the applicant and the respondent

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**Interpretation:** The interpretation of Section 14 of the IBC is crucial in determining whether

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**Application:** In this specific case, the application of Section 14 hinges on the timing of

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** Sangam (India)…
- **Respondents:** ADIG JEMTEX Pvt.…

## Timeline

- **2021-06-11 — Subsidy Re…**: Corporate Debtor received…
- **2021-06-17 — CIRP Init…**: CIRP initiated against…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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