# In the matter of ETCO Denim Pvt. Ltd.

> NCLT judgment dated 2023-12-08. Citation: TCN-2023-NCLT-00327. The case involves an application (I.A. 317/2022) filed by Central Bank of India under Section…

- **Court:** NCLT
- **Order date:** 8 Dec 2023
- **Citation:** TCN-2023-NCLT-00327
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/etco-denim-pvt-ltd-439d196b

## Summary

### Background

The case involves an application (I.A. 317/2022) filed by Central Bank of India under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016, against ETCO Denim Private Limited (Corporate Debtor). The application challenges the eligibility of the Ex-Promoter, Mr. Ramesh Shah, as a Successful Resolution Applicant and opposes the Resolution Plan submitted by him. The Corporate Insolvency Resolution Process (CIRP) was initiated against ETCO Denim Private Limited based on a Section 9 application filed by Mahakali Fuel Private Limited (Operational Creditor). The applicant contends that the corporate debtor does not fall under the criteria of MSME as per the Government Notification No. SO 1702(E) dated 01.06.2020 read with the MSMED Act, 2006.

## Facts

Mahakali Fuel Private Limited (Operational Creditor) filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, initiating Corporate Insolvency Resolution Process (CIRP) against ETCO Denim Private Limited (Corporate Debtor). Mr. Swapnil Mukund Agarwal was appointed as Interim Resolution Professional (IRP), later replaced by Mr. Nandkishore Deshpande. The Resolution Professional prepared an Information Memorandum dated 28.09.2021. The Corporate Debtor got registered as MSME after the CIRP was initiated, based on a notification dated 01.06.2020. Mr. Ramesh Shah, the Ex-Promoter of the Corporate Debtor, submitted a Resolution Plan in consortium with Masitia Capital Services Pvt. Ltd., which was approved by the CoC in its 26th meeting held on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor can be classified as …

**Ratio:** The Tribunal relied on several NCLAT and NCLT judgments, including Harkirat Singh Bedi

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**Reasoning:** The Tribunal reasoned that allowing a Corporate Debtor to obtain MSME status after the

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**Interpretation:** The Tribunal interpreted Section 240A of the Code as intended to benefit

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**Application:** The Tribunal applied the ratio to the facts of the case, noting that the

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## Parties

- **Judges:** LAKSHMI G…; Charanjeet Singh…
- **Appellants:** Central Bank of…
- **Respondents:** ETCO Denim Pvt.…; Nandkishore…

## Timeline

- **2020-02-14 — CIRP Init…**: The Tribunal admitted a Company Petition filed by Mahakali Fuel Private Limited,…
- **2020-02-20 — Appointment…**: Mr. Swapnil Mukund Agrawal was appointed 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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