# In the matter of Hindustan magnesium Products Private Limited Intervention Application No. 6-2022 in Company Petition (IB) No. 225-7-2021

> NCLT judgment dated 2023-02-17. Citation: TCN-2023-NCLT-04557. This case involves an application filed by Y. Vijay Kumar, the Applicant/Financial Creditor,…

- **Court:** NCLT
- **Order date:** 17 Feb 2023
- **Citation:** TCN-2023-NCLT-04557
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hindustan-magnesium-products-private-limited-intervention-application-no-6-2022-0fcabbe1

## Summary

### Background

This case involves an application filed by Y. Vijay Kumar, the Applicant/Financial Creditor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2013, seeking the recall of orders passed by the NCLT in IA (IBC) 499/2022 dated 07.07.2022 and the admission order dated 19.04.2022 in Company Petition (IB) 225/7/HDB/2021. The application arises from a dispute regarding a Memorandum of Understanding (MoU) between the Applicant and Respondent No. 2, K. Venkata Ratna Prasad, concerning a proposed 'Seed Investment' in Hindustan Magnesium Products Private Limited (HM). The Applicant alleges that Respondent No. 2 failed to adhere to the terms of the MoU, including the allotment of shares and the establishment of a joint venture. The Applicant also contends that Respondent

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## Facts

Y. Vijay Kumar, the Applicant/Financial Creditor, filed an application seeking the recall of orders passed in IA (IBC) 499/2022 and Company Petition (IB) 225/7/HDB/2021. The case revolves around Hindustan Magnesium Products Private Limited (HM). A Memorandum of Understanding (MoU) was entered into between the Applicant and Respondent No. 2, K. Venkata Ratna Prasad, regarding a 'Seed Investment' of Rs. 2,00,00,000/- in exchange for 18% equity in HM. The MoU also stipulated the establishment of a Joint Venture. The Applicant alleges that Respondent No. 2 failed to allot shares as agreed and did not establish the joint venture. The Applicant claims that Respondent No. 2 obtained orders in IA 499/2022 and CP 225/2021 through fraud, misrepresentation, and concealment of

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## Issues and analysis

### Issue 1: Whether the order in IA 499/2022 dated 07.07.2022 and the admission order dated 19.04.2022 in …

**Ratio:** The ratio is that a party alleging fraud and collusion must plead the details of the

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**Reasoning:** The Tribunal reasons that the Applicant has alleged fraud and collusion on the part of

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**Interpretation:** This issue concerns the interpretation of the requirements for pleading fraud

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**Application:** The ratio and reasoning are applied to the facts of the case by finding that

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## Parties

- **Judges:** Venkata Ramakrishn…; Shri. Chara…
- **Appellants:** Y. Vijay…
- **Respondents:** Hindustan…

## Timeline

- **2021-07-01 — Company Petiti…**: Company Petition (IB)…
- **2022-04-19 — Admission…**: Admission order passed in Company Petition (IB) 225/7/HDB/2021, admitting the Corporate…

## 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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