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

> NCLT judgment dated 2023-10-16. Citation: TCN-2023-NCLT-01196. The case involves an application filed by Lease Plan India Private Limited (Operational…

- **Court:** NCLT
- **Order date:** 16 Oct 2023
- **Citation:** TCN-2023-NCLT-01196
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shiva-industrial-security-agencygujarat-limited-a0519de8

## 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, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Shiva Industrial Security Agency (Gujarat) Limited (Corporate Debtor) for default in payment of Rs. 6,26,67,605/-. The Operational Creditor and Corporate Debtor had entered into a Master Lease Agreement for leasing of vehicles. The Corporate Debtor defaulted on payments from January 2018 onwards. A settlement agreement was reached on 24.05.2019, reducing the settlement amount. The Corporate Debtor issued two post-dated cheques, which were dishonored. The Operational Creditor issued a demand notice on 06.08.2020 under Section 8 of the

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## Facts

Lease Plan India Private Limited (Operational Creditor) filed an application 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). The claim was for Rs. 6,26,67,605/- due to default in payment. The Operational Creditor and Corporate Debtor entered into a Master Lease Agreement (No. ND 11980 dated 11.01.2016) for leasing 120 vehicles from 2016 onwards. The Corporate Debtor defaulted on payments from January 2018. A settlement agreement was executed on 24.05.2019, reducing the settlement amount. The Corporate Debtor issued two post-dated cheques (No. 406015 dated 24.08.2019 and No. 406017 dated 24.11.2019), which were dishonored

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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 prohibits the initiation of CIRP for defaults arising on or after

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

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**Interpretation:** Section 10A is interpreted to apply only to defaults occurring on or after

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**Application:** Since the default occurred on 19.12.2019, Section 10A does not bar the

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Lease Plan India…
- **Respondents:** Shiva Industrial…; Shiva Industrial…
- **Advocates:** Paritosh Bu…; Sweta Mo…

## Timeline

- **2016-01-11 — Master Lease A…**: Corporate Debtor and Operational Creditor entered into a Master Lease Agreement bearing…
- **2018-01-01 — Default in P…**: Corporate Debtor started defaulting in payment…

## 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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