# In the matter of Shiva Industrial Security Agency(Gujarat) Limited

> NCLT judgment dated 2023-10-16. Citation: TCN-2023-NCLT-01190. The case involves an application filed by Lease Plan India Private Limited (Operational…

- **Court:** NCLT
- **Order date:** 16 Oct 2023
- **Citation:** TCN-2023-NCLT-01190
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shiva-industrial-security-agencygujarat-limited-6a64e68b

## Summary

### Background

The case involves an application filed by Lease Plan India Private Limited (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shiva Industrial Security Agency (Gujarat) Limited (Corporate Debtor) for defaulting on a payment of Rs. 6,26,67,605/-. The Operational Creditor and Corporate Debtor had a transactional arrangement for leasing vehicles, but the Corporate Debtor started defaulting on payments from January 2018. A settlement agreement was made on 24.05.2019, reducing the settlement amount, and the Operational Creditor agreed to sell the leased vehicles to the Corporate Debtor. The Corporate Debtor issued two post-dated cheques, which were dishonored. The Operational

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## Facts

Lease Plan India Private Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shiva Industrial Security Agency (Gujarat) Limited (Corporate Debtor) for defaulting on a payment of Rs. 6,26,67,605/-. The Operational Creditor and Corporate Debtor had a transactional arrangement for leasing vehicles under a Master Lease Agreement dated 11.01.2016. 120 vehicles were leased to the Corporate Debtor from 2016 onwards. The Corporate Debtor started defaulting on payments from January 2018. A settlement agreement was made on 24.05.2019, reducing the settlement amount to Rs. 4,49,00,000/-, and the Operational Creditor agreed to sell the leased vehicles to the

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the IBC is maintainable considering Section 10A of the …

**Ratio:** Section 10A of the IBC, 2016, prohibits the initiation of CIRP for defaults arising on or

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**Reasoning:** The Adjudicating Authority observed that the date of default was clearly mentioned as

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**Interpretation:** Section 10A provides a temporary suspension of CIRP initiation for defaults

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**Application:** Since the default occurred on 19.12.2019, before the cutoff date of March 25,

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Lease Plan India…
- **Respondents:** Shiva Industrial…; Shiva Industrial…

## Timeline

- **2016-01-11 — Master Lease A…**: Corporate Debtor and Operational Creditor entered into a transactional arrangement for…
- **2018-01-01 — Default in P…**: Corporate Debtor started defaulting in making timely payments of monthly lease rentals…

## 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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