# In the matter of Reichindia Pharma Limited

> NCLT judgment dated 2024-02-28. Citation: TCN-2024-NCLT-02351. The case involves an application filed by Reichindia Pharma Limited under Section 10 of the…

- **Court:** NCLT
- **Order date:** 28 Feb 2024
- **Citation:** TCN-2024-NCLT-02351
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reichindia-pharma-limited-7c20f5a4

## Summary

### Background

The case involves an application filed by Reichindia Pharma Limited under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The company claimed inability to settle outstanding dues amounting to Rs.4,13,52,910 to various government departments. The company had availed loans from APSFC and SBI in 2011 to set up a pharmaceutical formulation unit, but incurred heavy losses and became NPA. The company sold its unit in February 2022 to repay loans but could not pay statutory dues. The application was filed after receiving notices from GST authorities, Commercial Taxes Department, EPFO, and ESIC for various tax and penalty defaults.

## Facts

Reichindia Pharma Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The company was incorporated on 21.08.1995 and engaged in the manufacture of chemical products. In 2011, it set up a pharmaceutical unit by availing loans from APSFC and SBI but incurred heavy losses, leading to its account becoming NPA. The company sold its unit in February 2022 to repay loans but failed to pay statutory dues amounting to Rs.4,13,52,910. The company received notices from GST authorities on 19.04.2023 for Rs.1,09,23,802 (principal tax) and Rs.1,74,27,191 (penalty), a notice from the Commissioner of Central Tax, an inquiry email from EPFO, and demand notices under the ESI

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## Issues and analysis

### Issue 1: Whether the application filed under Section 10 of the Insolvency and Bankruptcy Code, 2016, by the …

**Ratio:** The Adjudicating Authority is not obligated to admit a Section 10 application if the

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**Reasoning:** The NCLT reasoned that the Corporate Applicant filed the petition to defeat statutory

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**Interpretation:** Section 10 of the IBC allows a corporate applicant to initiate CIRP. However,

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**Application:** In this case, the NCLT found that Reichindia Pharma Limited filed the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Respondents:** Reichindia Pharma…

## Timeline

- **1995-08-21 — Incorporation o…**: Reichindia Pharma…
- **2011-01-01 — Setting up Pharmaceutica…**: The company set up a pharmaceutical formulation unit at Bhongir by availing loans from…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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