# In the matter of Divya Jyoti Sponge Iron Private Limited I.A.(IB) No. 207, 280 & 1010-KB-2019 in CP (IB) No. 363-KB-2017

> NCLT judgment dated 2022-03-08. Citation: TCN-2022-NCLT-03849. The case involves applications (I.A.s) filed under Section 74 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 8 Mar 2022
- **Citation:** TCN-2022-NCLT-03849
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/divya-jyoti-sponge-iron-private-limited-iaib-no-207-280-1010-kb-2019-in-cp-ib-no-8237629c

## Summary

### Background

The case involves applications (I.A.s) filed under Section 74 of the Insolvency and Bankruptcy Code, 2016, read with Section 60(5) of the same code. The applicants are seeking reliefs related to the non-implementation of a resolution plan approved for Divya Jyoti Sponge Iron Private Limited (Corporate Debtor). The resolution plan, submitted by C.P. Ispat Private Limited, was approved by the Committee of Creditors (CoC) on February 14, 2018, and subsequently by the Adjudicating Authority on March 13, 2018. The applicants, being operational creditors, claim that their dues were not cleared within the stipulated timeframe as per the resolution plan.

## Facts

Divya Jyoti Sponge Iron Private Limited underwent Corporate Insolvency Resolution Process (CIRP). C.P. Ispat Private Limited's resolution plan was approved by the Committee of Creditors (CoC) on 14 February 2018, and by the Adjudicating Authority on 13 March 2018. Maan Steel & Power Limited, Al Ahad Traders Private Limited, and Dhanbad Fuels Limited, being operational creditors, filed claims against Divya Jyoti Sponge Iron Private Limited. Maan Steel & Power Limited supplied iron ore with dues of ₹11,61,404. Al Ahad Traders Private Limited supplied Iron Ore Pellets with dues of ₹87,64,486. Dhanbad Fuels Limited supplied Sponge Iron and Coal with dues of ₹75,55,558. The resolution plan proposed a haircut of 52.51% for operational creditors, to be paid within six

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## Issues and analysis

### Issue 1: Whether the Respondent No. 1 and its related parties are liable for non-implementation of the …

**Ratio:** Section 74(3) of the Insolvency and Bankruptcy Code, 2016, provides for penalties for

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**Reasoning:** The court notes that the Resolution Applicant did not implement the Resolution Plan after

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**Interpretation:** Section 74(3) of the Code provides for penal consequences for non-compliance

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**Application:** The court relieves the Resolution Applicant from Section 74(3) of the Code

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** Maan Steel &…
- **Respondents:** Divya Jyoti…

## Timeline

- **2018-02-14 — Approval…**: The Resolution Plan submitted by C.P. Ispat Private Limited was approved by the Committee…
- **2018-03-13 — Approval by Adjudicating…**: The Adjudicating Authority approved the Resolution Plan submitted by C.P. Ispat Private…

## 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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