# In the matter of Atlas Cycles (Haryana) Limited IA No. 395-2021 in CP (IB) No. 217-Chd-Hry-2020

> NCLT judgment dated 2022-10-10. Citation: TCN-2022-NCLT-00788. The application IA No. 395/2021 was filed by Mrs. Sumati Jain, the legal heir of Vijender Kumar…

- **Court:** NCLT
- **Order date:** 10 Oct 2022
- **Citation:** TCN-2022-NCLT-00788
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/atlas-cycles-haryana-limited-ia-no-395-2021-in-cp-ib-no-217-chd-hry-2020-0c8b41f1

## Summary

### Background

The application IA No. 395/2021 was filed by Mrs. Sumati Jain, the legal heir of Vijender Kumar Jain, proprietor of M/s Arihant Cycles, to substitute the name of Vijender Kumar Jain and continue the proceedings in CP (IB) No. 217/Chd/Hry/2020. Vijender Kumar Jain, the operational creditor, had filed a petition under Section 9 of the IBC, 2016, for initiating the Corporate Insolvency Resolution Process. However, during the proceedings, Vijender Kumar Jain passed away, leaving behind five legal heirs. Four of the legal heirs executed a relinquishment deed in favor of the applicant, Sumati Jain. The application was filed within the limitation period of 90 days from the date of death.

## Facts

Vijender Kumar Jain, proprietor of M/s. Arihant Cycles, filed CP (IB) No. 217/Chd/Hry/2020 under Section 9 of the IBC, 2016, as an operational creditor against M/s. Atlas Cycles (Haryana) Limited. During the proceedings, Vijender Kumar Jain passed away intestate, leaving behind five legal heirs. Four legal heirs executed a relinquishment deed in favor of Sumati Jain, who then filed IA No. 395/2021 to substitute her name in place of the deceased. The respondent, M/s. Atlas Cycles, opposed the application, arguing that legal heirs are not covered under the definition of operational creditors as per Section 5(20) of the IBC, 2016. Sumati Jain contended that she is a Class I legal heir and has stepped into the shoes of the deceased, becoming the operational creditor by

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## Issues and analysis

### Issue 1: Whether the legal heir of a deceased operational creditor can be substituted in place of the …

**Ratio:** The legal principle is that the rights and obligations of a deceased person devolve upon

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**Reasoning:** The court reasoned that the applicant, being the legal heir and having obtained a

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**Interpretation:** The interpretation is that the IBC, 2016, allows for the substitution of a

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**Application:** In this case, the applicant, Sumati Jain, being the legal heir of the deceased

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Vijender Kumar…
- **Respondents:** M/s. Atlas Cycles…

## Timeline

- **2020-01-01 — Filing of CP (IB) No.…**: Vijender Kumar Jain filed CP (IB) No. 217/Chd/Hry/2020 under Section 9 of the IBC, 2016,…
- **N/A — Death of Vijender Kumar…**: Vijender Kumar Jain passed away…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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