# In the matter of Sterling Lam Ltd.

> NCLT judgment dated 2024-02-22. Citation: TCN-2024-NCLT-02451. The case involves multiple Interlocutory Applications (IAs) filed in connection with Corporate…

- **Court:** NCLT
- **Order date:** 22 Feb 2024
- **Citation:** TCN-2024-NCLT-02451
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sterling-lam-ltd-7a252f0f

## Summary

### Background

The case involves multiple Interlocutory Applications (IAs) filed in connection with Corporate Insolvency Resolution Process (CIRP) of Sterling Lam Ltd. IA/522(AHM)2021 was filed by the Resolution Professional (RP) seeking directions regarding encumbrances on the corporate debtor's property and payment of claims. The Gujarat State Tax Department submitted a claim, part of which was accepted. The RP found encumbrances on the factory land and requested their removal. The matter was discussed in the Committee of Creditors (CoC) meeting. A resolution plan by Naresh Tradelink Private Limited was approved by the Tribunal. Int. Pet/2(AHM)2024 was filed by the Financial Creditor seeking to join as a party in IA 522/2021. IA/195(AHM)2024 was filed by the Financial Creditor

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Sterling Lam Ltd. CP(IB) 72 of 2018. Kailash T Shah was appointed as the Resolution Professional (RP). The Gujarat State Tax Department submitted a claim of Rs.38,58,19,833/-, which was accepted for Rs.3,37,65,975/-. The RP discovered encumbrances on the factory land of the corporate debtor for the years 2014-15, 2017-18, and 2018-19. The RP requested the removal of these encumbrances. Naresh Tradelink Private Limited's resolution plan was approved by the CoC and the Tribunal on 29.06.2022. The resolution plan included payments to financial creditors, operational creditors, and CIRP costs. The State Tax Department claimed to be a secured creditor based on outstanding tax dues and Section 48 of the

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## Issues and analysis

### Issue 1: Whether the State Tax Department should be treated as a secured creditor under Section 53 of the …

**Ratio:** Section 53 of the IBC outlines the priority of distribution of assets in liquidation. The

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**Reasoning:** The Tribunal relied on the Supreme Court's judgment in State Tax Officer vs. Rainbow

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**Interpretation:** The interpretation of Section 53 of the IBC, in conjunction with the GVAT Act

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**Application:** In this case, the Tribunal applied the Supreme Court's ruling to the facts and

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Kailash…
- **Respondents:** Sterling L…; GUJARAT STATE TAX…

## Timeline

- **2018-01-01 — CP(IB) 72 of 2…**: CP(IB) 72 of 2018 was filed, initiating the Corporate Insolvency Resolution Process…
- **2020-11-10 — Order on CP(IB) 72 of…**: CP(IB) 72 of 2018 came to…

## 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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