# In the matter of Manthan Broadband Services Private Limited

> NCLT judgment dated 2024-01-12. Citation: TCN-2024-NCLT-03095. The case involves a dispute over the liquidation of Manthan Broadband Services Private Limited.…

- **Court:** NCLT
- **Order date:** 12 Jan 2024
- **Citation:** TCN-2024-NCLT-03095
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/manthan-broadband-services-private-limited-61ce50eb

## Summary

### Background

The case involves a dispute over the liquidation of Manthan Broadband Services Private Limited. Alliance Broadband Services Private Limited, a financial creditor, initiated corporate insolvency resolution process (CIRP) against Manthan. The primary issue revolves around the sale of 77,500 shares of Alliance held by Manthan, which is undergoing liquidation. The suspended board of Manthan challenged the e-auction of these shares, claiming they are undervalued and subject to a security interest that has not been properly relinquished. Several IAs were filed, including one by Kalyankari Texfab Private Limited, seeking to intervene as the highest bidder in the e-auction. The liquidator sought permission to proceed with the sale and issue a Letter of Intent (LOI) to the

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## Facts

1. Alliance Broadband Services Private Limited (Alliance) extended a loan of Rs. 10.20 crores to Manthan Broadband Services Private Limited (Manthan).
2. Manthan pledged 77,500 shares of Alliance to Alliance as security for the loan.
3. Manthan was admitted into insolvency on 2019-09-18 under CP (IB) No. 1634/KB/2018.
4. A liquidation order was passed against Manthan on 2022-04-06.
5. The Liquidator initiated a process to sell the said shares, inviting Expressions of Interest (EOI) on 2023-01-11.
6. Kalyankari Texfab Private Limited deposited Rs. 90 lakhs as earnest money to participate in the e-auction.
7. On 2023-02-14, the Tribunal permitted the e-auction to proceed, subject to the outcome of IA(IB) No. 334/KB/2023.
8. Kalyankari Texfab emerged as the highest bidder in the

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## Issues and analysis

### Issue 1: Whether the liquidator can proceed with the sale of 77,500 shares of Alliance Broadband Services …

**Ratio:** Regulation 21A of the IBBI (Liquidation Process) Regulations stipulates that a secured

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**Reasoning:** The court reasoned that Alliance failed to comply with Regulation 21A by not intimating

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**Interpretation:** Regulation 21A is interpreted as mandatory, requiring secured creditors to act

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**Application:** Since Alliance did not comply with Regulation 21A, the shares are considered

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Alliance Broadband…
- **Respondents:** Manthan Broadband…; Kuldeep…

## Timeline

- **2017-04-01 — Pledge Agr…**: Shares pledged by CD to…
- **2019-09-18 — Insolvency Ad…**: Manthan admitted to insolvency…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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