# In the matter of Vallabh Textiles Company Limited IA No. 685-2020 & IA No. 1551-2022 in CP (IB) No.391-Chd-Pb-2018

> NCLT judgment dated 2023-06-12. Citation: TCN-2023-NCLT-02981. The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 12 Jun 2023
- **Citation:** TCN-2023-NCLT-02981
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vallabh-textiles-company-limited-ia-no-685-2020-ia-no-1551-2022-in-cp-ib-no391-c-ab825b7b

## Summary

### Background

The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking direction to the respondent, M/s. Bansal Yarns Private Limited, to pay the corporate debtor, M/s. Vallabh Textiles Company Limited, an amount of Rs. 22,30,093/- along with interest. The CIRP was initiated on 12.04.2019 at the instance of Punjab National Bank. A transaction audit revealed that Rs. 22,30,093/- remained outstanding from the respondent. Another application, IA No. 1551/2022, was filed seeking clarification of an earlier order, but the Tribunal found no mistake or ambiguity in the impugned order.

## Facts

Punjab National Bank initiated Corporate Insolvency Resolution Process (CIRP) against M/s. Vallabh Textiles Company Limited, which was admitted on 2019-04-12. M/s. Bansal Yarns Private Limited, a buyer from the corporate debtor, allegedly had an outstanding amount of Rs. 22,30,093/-. The Resolution Professional filed an application (IA No. 685/2020) seeking direction for M/s. Bansal Yarns Private Limited to pay this amount along with interest. The respondent allegedly did not return the goods purchased and utilized them. The Resolution Professional produced documentary evidence to support the claim. M/s. Bansal Yarns Private Limited did not file any reply despite service of notice. Another application (IA No. 1551/2022) was filed seeking clarification of a previous

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## Issues and analysis

### Issue 1: Whether M/s. Bansal Yarns Private Limited should be directed to pay the outstanding amount of Rs. …

**Ratio:** Section 25 of the Insolvency and Bankruptcy Code (IBC) stipulates that the Resolution

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**Reasoning:** The court found sufficient documentary evidence produced by the Resolution Professional

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**Interpretation:** Section 25 of the IBC grants the Resolution Professional the power to manage

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**Application:** The court applied Section 25 of the IBC to direct M/s. Bansal Yarns Private

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Punjab National…
- **Respondents:** M/s Vallabh…

## Timeline

- **2019-04-12 — CIRP Init…**: CIRP initiated against M/s. Vallabh Textiles Company Limited based on a petition by…
- **2019-03-31 — Respondent Stopped…**: M/s. Bansal Yarns Private Limited stopped…

## 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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