# In the matter of Power Max(India) Private Limited IA (I.B.C) No. 825-KB-2022, IA (I.B.C) No. 58-KB-2023 and C.P. (I.B) No. 104-KB-2022

> NCLT judgment dated 2023-05-01. Citation: TCN-2023-NCLT-03536. Power Max (India) Private Limited filed a petition under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 May 2023
- **Citation:** TCN-2023-NCLT-03536
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/power-maxindia-private-limited-ia-ibc-no-825-kb-2022-ia-ibc-no-58-kb-2023-and-cp-ac40e65e

## Summary

### Background

Power Max (India) Private Limited filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against itself. The company faced financial difficulties due to the COVID-19 pandemic and subsequent lockdown, which disrupted operations, affected contract execution, and eroded liquidity. The company's application was supported by a special resolution passed by its shareholders. Cobit Engineering Private Limited and Singhvi Rolling Shutters & Engineering Works, being operational creditors, filed applications (IA (I.B.C) No. 825/KB/2022 and IA (I.B.C) No. 58/KB/2023 respectively) seeking directions for Power Max to pay outstanding amounts.

## Facts

Power Max (India) Private Limited, incorporated on April 28, 1984, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, for initiating CIRP against itself. The company, engaged in providing integrated engineering services, faced financial difficulties due to the COVID-19 pandemic and lockdown. The company's operations were disrupted, leading to failure in honoring contract timelines. Customers adjusted caution money deposits and invoked bank guarantees, resulting in defaults on cash credit and other facilities. The company approached Indian Bank for restructuring its credit facilities, but the bank did not provide the necessary support. The company defaulted on payments to the tune of Rs. 40.50 Crores as of January 3, 2022. The company

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## Issues and analysis

### Issue 1: Whether the application filed by Power Max (India) Private Limited under Section 10 of the …

**Ratio:** The Hon'ble NCLAT in Krishna KraftexPvt. Ltd. versus HDFC Bank & Ors. (2018 SCC

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**Reasoning:** The court relied on precedents set by the NCLAT and Supreme Court, emphasizing that if a

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**Interpretation:** Section 10 of the IBC allows a corporate debtor to initiate CIRP against itself

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**Application:** The court found that Power Max (India) Private Limited was in default of a debt

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Respondents:** Power Max (India)…

## Timeline

- **1984-04-28 — Incorporation of…**: Power Max (India) Private Limited was incorporated under the provisions of the Companies…
- **2022-02-23 — Board Reso…**: Board Resolution dated 23 February, 2022…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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