# In the matter of Eastern Sugar & Industries Limited

> NCLT judgment dated 2024-10-24. Citation: TCN-2024-NCLT-00360. The case involves an application filed by Kundan Minerals and Metals Limited (formerly known as…

- **Court:** NCLT
- **Order date:** 24 Oct 2024
- **Citation:** TCN-2024-NCLT-00360
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/eastern-sugar-industries-limited-607332fb

## Summary

### Background

The case involves an application filed by Kundan Minerals and Metals Limited (formerly known as Kundan Care Limited), the Successful Resolution Applicant (SRA) of the Corporate Debtor, Eastern Sugar & Industries Limited, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, against the Respondent National Stock Exchange of India Limited, Mumbai. The SRA sought reliefs related to the implementation of the resolution plan, specifically addressing concerns raised by the NSE regarding the reduction of public shareholding below the minimum threshold stipulated by SEBI regulations.

## Facts

Kundan Minerals and Metals Limited (formerly known as Kundan Care Limited) is the Successful Resolution Applicant (SRA) for Eastern Sugar & Industries Limited, the Corporate Debtor. The Corporate Debtor was admitted into CIRP on 2022-02-11. The resolution plan submitted by the SRA was approved by the Adjudicating Authority on 2023-10-04. The resolution plan, dated 2022-11-17, and its addendum, dated 2022-11-23, proposed a reduction in public shareholding to 2.28%, which the National Stock Exchange of India Limited (NSE) contended was in violation of Rule 19A(5) of the Securities Contracts (Regulation) Rules, 1957 (SCR Rules). The SCR Rules mandate a minimum public shareholding of 25%, later amended to at least 5%. The SRA argued that the reduction was an

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the jurisdiction to entertain an application for …

**Ratio:** Section 60(5)(c) of the I&B Code and Rule 11 of the NCLT Rules grant the Adjudicating

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**Reasoning:** The court reasoned that Section 60(5)(c) of the I&B Code provides the jurisdictional

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**Interpretation:** Section 60(5)(c) and Rule 11 are interpreted to provide the NCLT with broad

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**Application:** The court applied these provisions to find that it had the jurisdiction to

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Kundan Minerals…
- **Respondents:** Eastern Sugar &…; National Stock…

## Timeline

- **2022-02-11 — CIRP Admi…**: Eastern Sugar & Industries…
- **2023-10-04 — Resolution Plan…**: The Adjudicating Authority approved the…

## 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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