# In the matter of Bhagat Ram Motor Ways Pvt. Ltd.

> NCLT judgment dated 2023-12-22. Citation: TCN-2023-NCLT-00058. State Bank of India filed an application under Section 60(5) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 22 Dec 2023
- **Citation:** TCN-2023-NCLT-00058
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bhagat-ram-motor-ways-pvt-ltd-18400ddb

## Summary

### Background

State Bank of India filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the NCLT Rules, 2016, against the liquidator, Arvind Kumar, seeking a stay on the e-auction of certain assets of Bhagat Ram Motorways Pvt. Ltd., arguing that these assets do not form part of the liquidation estate. The assets in question are a workshop & showroom and a guest house, both located in Rakkar Colony Una. The applicant contended that these assets should not be auctioned until IA No.451/2022 and 431/22, which are pending before the Adjudicating Authority, are disposed of.

## Facts

Bhagat Ram Motorways Pvt. Ltd. is undergoing liquidation. State Bank of India, a financial creditor with a 38.23% voting share in the Stakeholders Consultative Committee (SCC), filed an application to stay the e-auction of certain assets (workshop & showroom and guest house in Rakkar Colony Una) by the liquidator, Arvind Kumar. SBI claimed these assets are not part of the liquidation estate. The liquidator argued that the assets are part of the liquidation estate as evidenced in the corporate debtor's audited balance sheets and that SBI did not attend the SCC meeting where the auction decision was made. IA No.431/22 filed by the liquidator and IA No.451/22 filed by the applicant were withdrawn. The Adjudicating Authority considered SBI's membership in the SCC and

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India for a stay on the e-auction of certain assets …

**Ratio:** An application is not maintainable if the applicant has not exhausted available remedies

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**Reasoning:** The court reasoned that State Bank of India, being a member of the SCC, should have

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**Interpretation:** Section 60(5) of the IBC provides the NCLT with jurisdiction to entertain any

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**Application:** The court applied the ratio to the facts by determining that SBI's application

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## Parties

- **Judges:** Harnam Singh…; L. N. G…
- **Appellants:** State Bank of…
- **Respondents:** Bhagat Ram…; Arvind Kumar,…

## Timeline

- **2023-12-21 — Withdrawal of IA…**: The liquidator withdrew IA No.431/22, and the applicant, State Bank of India, withdrew IA…
- **2023-12-22 — Order Del…**: The Adjudicating Authority dismissed the application filed by State Bank of India as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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