# In the matter of Jayaswal Neco Industries Limited I.A.-2973-2022 In CP(IB)-1027/(MB)-2022

> NCLT judgment dated 2023-02-09. Citation: TCN-2023-NCLT-04705. This case involves an Interlocutory Application (IA/2973/2022) filed by Jayaswal Neco…

- **Court:** NCLT
- **Order date:** 9 Feb 2023
- **Citation:** TCN-2023-NCLT-04705
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jayaswal-neco-industries-limited-ia-2973-2022-in-cpib-1027mb-2022-cf742479

## Summary

### Background

This case involves an Interlocutory Application (IA/2973/2022) filed by Jayaswal Neco Industries Limited (JNIL), the Corporate Debtor, seeking the dismissal of a Company Petition (CP(IB)/1027/(MB)/2022) filed by Abhiruchi Vision Private Limited (AVPL), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The application also sought permission for JNIL to file an affidavit in reply to the Company Petition. The dispute stems from an Indenture of Family Settlement (IFS) dated 31.07.2008 between the Manoj Kumar Jayaswal Group and the BL Shaw Group, concerning the demerger of a Strip Mill Division. AVPL claimed dues based on this IFS, which JNIL contested, arguing that the claim was not maintainable due to prior arbitration proceedings

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## Facts

The case revolves around a dispute between Jayaswal Neco Industries Limited (JNIL) and Abhiruchi Vision Private Limited (AVPL). AVPL, as the Financial Creditor, filed a Company Petition (CP(IB)/1027/(MB)/2022) under Section 7 of the Insolvency and Bankruptcy Code (IBC) against JNIL, the Corporate Debtor, based on an alleged debt of INR 102,26,78,728/-. This debt allegedly arose from an Indenture of Family Settlement (IFS) dated 2008-07-31 between the Manoj Kumar Jayaswal Group and the BL Shaw Group, concerning the demerger of a Strip Mill Division. The IFS stipulated that the Strip Mill Division of CIAL would be demerged from CIAL and subsequently merged into JNIL. The MKJ Group (through CIAL) had borrowed from various banks and financial institutions for running the

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## Issues and analysis

### Issue 1: Whether the Section 7 application filed by AVPL is maintainable given the prior arbitration …

**Ratio:** The principle is that a claim that has been subject to arbitration proceedings and has

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**Reasoning:** The court reasoned that the alleged debt was the subject matter of arbitration

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**Interpretation:** This interprets that once a dispute has been resolved through arbitration and a

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**Application:** The court applied this principle to the facts by noting that the claim made by

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Respondents:** Jayaswal Neco…; Abhiruchi Vision…

## Timeline

- **2008-07-31 — Indenture of Family…**: An Indenture of Family Settlement was agreed…
- **2011-05-09 — Special Civil S…**: The MKJ Group filed Special Civil Suit No. 584/2011 before the 3rd Joint Civil Judge,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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