# In the matter of Rajendra Narottamdas Sheth & Anr. Vs. Chandra Prakash Jain & Anr. Civil Appeal No.4222 of 2020

> SC judgment dated 2021-09-30. Citation: TCN-2021-SC-00014. The case involves an appeal against the rejection of an application under Section 7 of the…

- **Court:** SC
- **Order date:** 30 Sept 2021
- **Citation:** TCN-2021-SC-00014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/rajendra-narottamdas-sheth-anr-vs-chandra-prakash-jain-anr-civil-appeal-no4222-o-8bf6b7ff

## Summary

### Background

The case involves an appeal against the rejection of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the National Company Law Appellate Tribunal (NCLAT). The application was filed by Union Bank of India (Financial Creditor) against R.K. Infratel Ltd. (Corporate Debtor). The Corporate Debtor had taken loans from the Financial Creditor, which were later classified as a non-performing asset (NPA). The Financial Creditor filed an application under Section 7 of the IBC, which was admitted by the National Company Law Tribunal (NCLT). The Corporate Debtor appealed to the NCLAT, which rejected the appeal. The Corporate Debtor then appealed to the Supreme Court.

## Facts

R.K. Infratel Ltd. (Corporate Debtor) is in the business of setting up underground fiber networks. Union Bank of India (Financial Creditor) sanctioned a loan of Rs. 4.5 crore to the Corporate Debtor on 08.12.2012, and another loan of Rs. 3.5 crore was granted and repaid on 28.05.2018. Subsequently, the Corporate Debtor was unable to settle the dues, and its account was declared an NPA on 30.09.2014. The Financial Creditor issued a recovery notice on 01.10.2014 and filed an application before the Debt Recovery Tribunal. On 25.04.2019, the Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), which was admitted on 01.06.2020. The Corporate Debtor owed Rs. 24.62 crore as of 31.03.2019. The Corporate Debtor argued that the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC filed by a power of attorney holder is …

**Ratio:** A person authorized by way of a power of attorney can file an application under Section 7

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**Reasoning:** The NCLAT examined the power of attorney and found that Mr. Praveen Kumar Gupta was given

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**Interpretation:** General authorization given to an officer of the financial creditor by means of

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**Application:** Mr. Praveen Kumar Gupta was given general authorization by the Bank, including

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## Parties

- **Judges:** L. Nageswa…; B.R. G…; +1 more
- **Appellants:** Sh. Rajendra…
- **Respondents:** R.K. Infrat…; Chandra Prakash…

## Timeline

- **2012-12-08 — Loan Sanc…**: Union Bank of India sanctioned a loan of…
- **2018-05-28 — Loan Rep…**: Another loan of Rs. 3.5 crore was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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