# In the matter of Ashok G. Rajani Vs. Beacon Trusteeship Ltd. & Ors. Civil Appeal No.4911 of 2021

> SC judgment dated 2022-09-22. Citation: TCN-2022-SC-00020. This case involves an appeal against an interim order passed by the National Company Law Appellate…

- **Court:** SC
- **Order date:** 22 Sept 2022
- **Citation:** TCN-2022-SC-00020
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/ashok-g-rajani-vs-beacon-trusteeship-ltd-ors-civil-appeal-no4911-of-2021-7ae36e5c

## Summary

### Background

This case involves an appeal against an interim order passed by the National Company Law Appellate Tribunal (NCLAT) concerning the Corporate Insolvency Resolution Process (CIRP) of M/s Seya Industries Limited. The appellant, a former director, challenged the NCLAT's decision to allow the Interim Resolution Professional (IRP) to proceed with the CIRP despite a settlement being reached between the parties. The NCLT had admitted an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by the respondents against the Corporate Debtor. The NCLAT granted an interim stay on the publication of the CIRP but allowed the IRP to continue with the process. The appellant argued that the NCLT should have allowed the withdrawal of the application under Section

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## Facts

M/s Seya Industries Limited, the Corporate Debtor, engaged in manufacturing benzene-based Speciality Chemicals since 1990, invested Rs.400 Crores in existing facilities and Rs.900 Crores in a Greenfield Mega Project. To expand its plant at Tarapur, Palghar, it raised capital, with Beacon Trusteeship Limited committing Rs. 100 Crores via Compulsorily Convertible Preference Shares (CCPS) and Non-Convertible Debentures (NCDs). A Debenture Trust Deed (DTD) was executed, outlining the terms. Beacon Trusteeship released Rs.72 Crores towards debentures in March 2019, intended for capacity expansion. Beacon Trusteeship defaulted on the second tranche of Rs. 8 Crores. The Corporate Debtor requested payment of the second tranche in May 2019. In September 2019, the Corporate

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## Issues and analysis

### Issue 1: Whether the NCLAT erred in allowing the Interim Resolution Professional (IRP) to proceed with the …

**Ratio:** Section 12A of the IBC enables the Adjudicating Authority to allow the withdrawal of an

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**Reasoning:** The court reasoned that the question of approval of the Committee of Creditors by the

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**Interpretation:** Section 12A of the IBC and Rule 11 of the NCLT Rules should be interpreted to

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**Application:** In this case, the court found that the NCLAT's order was an interim order and

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## Parties

- **Judges:** INDIRA BA…; J.K. MAHE…
- **Appellants:** Ashok G R…
- **Respondents:** M/s Seya Industrie…; Beacon Trusteeship…

## Timeline

- **2019-03-11 — Beacon Trusteeship…**: Beacon Trusteeship released Rs.72 Crores…
- **2019-05-31 — Corporate Debtor…**: The Corporate Debtor sent an email to the Respondents requesting payment of the second…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62 — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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