# In the matter of UTM Engineering Private Limited IA-3113 & 3172-2021 in IB No. 248-ND-2019

> NCLT judgment dated 2022-05-09. Citation: TCN-2022-NCLT-02822. The case involves two applications, IA 3113/ND/2021 and IA 3172/ND/2021, related to the…

- **Court:** NCLT
- **Order date:** 9 May 2022
- **Citation:** TCN-2022-NCLT-02822
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/utm-engineering-private-limited-ia-3113-3172-2021-in-ib-no-248-nd-2019-3e2c329a

## Summary

### Background

The case involves two applications, IA 3113/ND/2021 and IA 3172/ND/2021, related to the insolvency and liquidation of UTM Engineering Pvt. Ltd. IA 3113/ND/2021 was filed by the liquidator seeking approval for the bid received from Red Brick Consulting Pvt. Ltd. for acquiring the Corporate Debtor as a going concern. IA 3172/ND/2021 was filed by TCM-UTM (JV) seeking to quash the sale of the Corporate Debtor to Red Brick Consulting Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated on 2019-10-17, and the liquidation process commenced on 2020-10-15. Kanti Mohan Rustagi was appointed as the liquidator.

## Facts

The Corporate Insolvency Resolution Process (CIRP) for UTM Engineering Pvt. Ltd. was initiated on 2019-10-17, followed by the commencement of liquidation on 2020-10-15, with Kanti Mohan Rustagi appointed as liquidator. The liquidator issued a public announcement and conducted stakeholder meetings to facilitate the sale of the Corporate Debtor as a going concern. An e-auction was conducted on 2021-06-16, where Red Brick Consulting Pvt. Ltd. emerged as the successful bidder. However, TCM-UTM (JV), a joint venture partner, filed an application (IA 3172/ND/2021) to quash the sale, alleging that Red Brick was ineligible under Section 29A of the Insolvency and Bankruptcy Code (IBC) due to the involvement of Gyandeep Kantipudi, who was an ex-director of UTM Engineering and a

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## Issues and analysis

### Issue 1: Whether Red Brick Consulting Pvt. Ltd. is …

**Ratio:** A company is only a necessary party if it has accrued substantive rights. If the bid

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**Reasoning:** The Tribunal reasoned that Red Brick was merely a successful bidder, and since the sale

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**Interpretation:** This interprets the concept of a 'necessary party' in the context of an

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**Application:** Applied to the facts, since Red Brick had not completed the purchase, they were

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## Parties

- **Judges:** Sh. Shri Dharminde…; SUMITAPURKA…
- **Appellants:** Argentium…
- **Respondents:** UTM Engineering…

## Timeline

- **2019-10-17 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2020-10-15 — Liquidation Com…**: Liquidation process commenced…

## 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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