# In the matter of Sterling International Enterprises Limited

> NCLT judgment dated 2023-09-14. Citation: TCN-2023-NCLT-01622. The Securities and Exchange Board of India (SEBI) filed a Company Appeal under Section 42 of…

- **Court:** NCLT
- **Order date:** 14 Sept 2023
- **Citation:** TCN-2023-NCLT-01622
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sterling-international-enterprises-limited-0da60113

## Summary

### Background

The Securities and Exchange Board of India (SEBI) filed a Company Appeal under Section 42 of the Insolvency & Bankruptcy Code, 2016 (IBC), challenging the Liquidator's rejection of its claim of Rs. 2,00,000. The claim arose from an adjudication order passed by SEBI against the Corporate Debtor for alleged violations of securities regulations. The Liquidator rejected the claim citing that it was filed after the liquidation commencement date. SEBI argued that as a statutory authority, it was determining the penalty payable by the Corporate Debtor and that the liquidator has an obligation to ensure that the levy of penalty is legal.

## Facts

SEBI conducted an investigation into irregular trading activities of SREI Infrastructure Finance Limited (Corporate Debtor) between 2008 and 2009. Following the investigation, SEBI initiated adjudication proceedings against the Corporate Debtor for violating securities regulations. A show cause notice was issued to the Corporate Debtor in February 2020. The Corporate Debtor was relegated to insolvency proceedings in July 2018 and subsequently went into liquidation in October 2021. The liquidator made a public announcement for stakeholders to file claims. SEBI submitted Form-C to the Liquidator in December 2022, claiming Rs. 2,00,000, which was rejected by the Liquidator in January 2023 due to delay. SEBI filed Company Appeal No. 7 of 2023, which was allowed, condoning

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## Issues and analysis

### Issue 1: Whether the claim of SEBI amounting to Rs. 2,00,000/- which arose consequent to passing of the …

**Ratio:** The determination of statutory dues is allowed during the liquidation period, and filing

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**Reasoning:** The court relied on the principle that the authorities can only take steps to determine

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**Interpretation:** The court interpreted that if the determination of statutory dues is allowed

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**Application:** The court applied the ratio to the specific facts, stating that the dues

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## Parties

- **Judges:** LAKSHMI G…; SH. CHARANJEET…
- **Appellants:** Securities and…
- **Respondents:** SREI Infrastructur…; Vishal Ghisulal…

## Timeline

- **2008-05-01 — Investigation Period…**: SEBI initiated investigation into irregular…
- **2009-09-30 — Investigation P…**: End date of SEBI's investigation into irregular trading activities of the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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