# In the matter of Reliance Naval and Engineering Ltd. IA No. 646-NCLT-AHM-2022 in CP(IB) No. 418-NCLT-AHM-2018

> NCLT judgment dated 2023-05-17. Citation: TCN-2023-NCLT-03295. The case involves an application (IA 646 of 2022) filed by the Resolution Professional (RP) of…

- **Court:** NCLT
- **Order date:** 17 May 2023
- **Citation:** TCN-2023-NCLT-03295
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliance-naval-and-engineering-ltd-ia-no-646-nclt-ahm-2022-in-cpib-no-418-nclt-a-3b98e5ef

## Summary

### Background

The case involves an application (IA 646 of 2022) filed by the Resolution Professional (RP) of Reliance Naval and Engineering Limited (RNEL) against Globalcom IDC Limited, a provider of information technology services to RNEL. The Corporate Insolvency Resolution Process (CIRP) was initiated against RNEL on 2020-01-15. The RP sought orders to prevent Globalcom from terminating services based on a termination letter issued on 2022-07-22, and to compel Globalcom to continue providing essential services under Section 14 of the IBC, read with Regulation 32 of the Corporate Insolvency Resolution Process Regulations. The resolution plan submitted by Hazel Mercantile Ltd. was approved on 2022-12-23, with a condition for upfront payment within 90 days.

## Facts

The Resolution Professional (RP) of Reliance Naval and Engineering Limited (RNEL) filed IA 646 of 2022 against Globalcom IDC Limited, which provided IT services to RNEL. The Corporate Insolvency Resolution Process (CIRP) against RNEL commenced on 2020-01-15. The RP sought to prevent Globalcom from terminating services based on a termination letter dated 2022-07-22. The RP also sought to compel Globalcom to continue providing essential services under Section 14 of the IBC, read with Regulation 32 of the Corporate Insolvency Resolution Process Regulations. The resolution plan submitted by Hazel Mercantile Ltd. was approved by the CoC on 2022-02-23 and by the Adjudicating Authority on 2022-12-23, requiring upfront payment within 90 days. Hazel Mercantile Ltd. sought an

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## Issues and analysis

### Issue 1: Whether Globalcom IDC Limited is obligated to continue providing information technology services to …

**Ratio:** The ratio is based on the interpretation of Section 14 of the IBC, 2016, Regulation 32 of

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**Reasoning:** The court reasoned that the Corporate Debtor had already substantially benefited from the

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**Interpretation:** The interpretation of Section 14 of the IBC, 2016, and Regulation 32 of the

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**Application:** The court applied the ratio and reasoning to the specific facts by noting that

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## Parties

- **Judges:** Deep Chandr…; Ajai Das Me…
- **Appellants:** Sudip Bhatt…
- **Respondents:** Reliance Naval &…; Reliance Naval…; +1 more

## Timeline

- **2020-01-15 — CIRP Init…**: Corporate Insolvency Resolution Process was initiated against Reliance Naval and…
- **2022-07-22 — Termination…**: Globalcom IDC Limited issued a…

## 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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