Anup Kumar Singh Vs Union of India & others. - In view of the proceedings pending under the IBC and the orders passed therein, the impugned provisional seizure order and the impugned notices could not have been issued. Therefore, the impugned notices are quashed. However, a proceeding can fairly be initiated against the erstwhile Director and the Officer of the corporate debtor, if they are found to be individually liable.

 HC Calcutta (2025.04.16) in Anup Kumar Singh Vs Union of India & others.  [WPA 4585 of 2023] held that.

• After liquidation order, the corporate debtor might be sold as a going concern or the assets might be sold. Therefore, once CIRP was admitted, the assets on corporate debtor could not be attached. They would be sold in CIRP or in liquidation.

• In Ramsarup Industries Limited (supra) and Others, the Hon‟ble Supreme Court held that the provisions of the IBC would override the provisions of the FEMA.

• In view of the proceedings pending under the IBC and the orders passed therein, the impugned provisional seizure order and the impugned notices could not have been issued. Therefore, the impugned notices are quashed. However, a proceeding can fairly be initiated against the erstwhile Director and the Officer of the corporate debtor, if they are found to be individually liable.

Excerpts of the Order;

# 1. This is an application praying for quashing of notices dated 30.11.2022 and 30.01.2023 issued under the provisions of the Foreign Exchange Management Act, 1999 (the FEMA, for short).

# 2. Learned senior counsel for the petitioner submitted as follows. Corporate insolvency resolution process (“CIRP”) of Shree Ganesh Jewellery House (I) Pvt. Ltd. (“Shree Ganesh”) commenced on 12.02.2018 pursuant to an order being passed by the National Company Law Tribunal (“NCLT”) at Kolkata under the provisions of the Insolvency and Bankruptcy Code, 2016 (“IBC”). Section 14 of the IBC prohibited the initiation of suits or continuation of pending suits or proceedings against the corporate debtor (in this case, Shree Ganesh) following the initiation of CIRP. On 14.09.2018, the NCLT directed that Shree Ganesh should be liquidated as per the provisions of the IBC. Furthermore, the writ petitioner was appointed as the liquidator by the NCLT. The writ petitioner in his capacity as an officer of the NCLT was duty bound to complete liquidation process of Shree Ganesh as per the provisions of the IBC and within the timelines which were presented under the IBC. While Section 14 of the IBC was applicable once CIRP was commenced in respect of any corporate debtor, Section 33(5) of the IBC was applicable once an order of liquidation had been passed by the NCLT. Section 33(5) stated as follows. “Subject to Section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor. Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority”. In CIRP, what was contemplated was approval of a Resolution Plan. After liquidation order, the corporate debtor might be sold as a going concern or the assets might be sold. Therefore, once CIRP was admitted, the assets of a corporate debtor could not be attached. They would be sold in CIRP or liquidation. After resolution plan or liquidation sale, assets could not be made subject matter of attachment in view of Section 32A of the IBC. Section 32A(2) of the IBC stated as under. “No action shall be taken against the property of the corporate debtor in relation to any offence committed prior to the commencement of the corporate insolvency resolution process of the corporate debtor, where such property is covered under a resolution plan approved by the Adjudicating Authority under Section 31, which results in the change in control of the corporate debtor to a person or sale of liquidation assets under the provisions of Chapter III of Part II of this Code to a person who was not, i) a promoter or in the management or control of the corporate debtor or a related party of such person or ii) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court. Explanation - For the purpose of this sub-section, it is hereby clarified that, i) an action against the property of a corporate debtor in relation to an offence shall include the attachment, seizure, retention or confiscation of such property under such law as may be applicable to the corporate debtor, ii) nothing in this subsection shall be construed to bar an action against the property of any person, other than the corporate debtor or a person who has acquired such property through corporate insolvency resolution process or liquidation process under this Code and fulfils the requirements specified in this Section, against whom such an action may be taken under such law as may be applicable.” Therefore, the scheme of the IBC was that once there was CIRP admission, the assets would not be subject matter of seizure or attachment. The provisions of sale and/or approval of resolution plan contemplated under the IBC were such that there could not be sale to a connected entity. Respondent No.2 had earlier issued a provisional order of attachment (POA) under the provisions of the Prevention of Money Laundering Act, 2002 (“PMLA”) in respect of the assets of Shree Ganesh on 16.04.2019, after an order of liquidation was passed in respect of Shree Ganesh, which was not confirmed and set by the Adjudicating Authority under the PMLA on 09.10.2019. The Respondent No.2 appealed against such decision. An order of status quo was passed in the said appeal proceedings on 20.09.2023. The writ petitioner was not concerned with the PMLA orders. They should dissolve upon sale in view of Section 32A of the IBC. On 30.11.2022, the writ petitioner was in receipt of an order of seizure no. 01/2022 (“Provisional Seizure Order”), which was issued by the respondent no. 2 under Section 37A of the Foreign Exchange Management Act, 1999 (“FEMA”) in respect of the assets of Shree Ganesh, the company. The issuance of the Provisional Seizure Order was in complete disregard of the moratorium prescribed by Section 33(5) of the IBC. On 31.01.2023, the writ petitioner was in receipt of a petition u/s 37A(2) of FEMA seeking confirmation of the Provisional Seizure Order from the respondent no. 3 directing him to personally appear in the proceedings (“Notice”). The issuance of the Notice was in breach of the moratorium imposed by Section 33(5) of the IBC. Accordingly, the writ petitioner filed the instant writ petition challenging the Provisional Seizure Order and the Notice. During the pendency of the writ petition, the respondent no. 3 on 23.05.2023 confirmed the Provisional Seizure Order. The order dated 23.05.2023 was subject to the result of the writ petition and was a lis pendens event. The order dated 23.05.2023 was a dependant order. Upon the writ petition succeeding, the same would naturally lose its force. The writ petitioner was compelled to file an appeal from the confirmation order dated 23.05.2023 before the Appellate Tribunal at New Delhi in view of the strict limitation period, which it did mentioning about the instant writ petition challenging the Provisional Seizure Order. Anyhow, this was of no issue since when provisional seizure order was under challenge, final order passed was subject to the result of the writ petition. In Ramsarup Industries Limited and Others v. Union of India and Another reported at 2022 SCC Online Cal 2571, when during the pendency of a writ petition challenging provisional attachment, the Authority issued confirmatory order, the writ petition was not found to be infructuous by this Court. The provisional order and final order were both stayed when the petitioner was found to be entitled to interim reliefs. It was submitted that the provisions of the IBC would override the provisions of the FEMA. Therefore, the moratorium under the IBC would override the provisions of the FEMA. Firstly, the IBC was a later Act, which was enacted by the legislature when the FEMA was already in force. Secondly, Section 238 of the IBC clearly stated that “The provisions of this Code shall have effect,notwithstanding anything inconsistent therewith contained in any other law  for the time being in force or any instrument having effect by virtue of such law.” When the legislature enacted the IBC, it was conscious of FEMA. On the other hand, the FEMA did not have any non-obstante clause. In this connection, reliance was placed on the following judgements. 

• i) Paschimanchal Viduyt Vitran Nigam Ltd. V. Raman Ispat Private Ltd. and Ors. reported at (2023) 10 SCC 60. The Hon‟ble Supreme Court of India held that Section 238 of the IBC would override the provisions of the Electricity Act, 2003 although the latter contained two specific provisions (Section 173 and Section 174) that had overriding effect over all other laws, 

• ii) Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs reported at (2023) 1 SCC 472. The Hon‟ble Supreme Court of India held that the provisions of the IBC would prevail over the Customs Act, 1962 due to Section 238 of IBC, 

• iii) Duncans Industries Limited v. AJ Agrochem reported at (2019) 9 SCC 725. The Hon‟ble Supreme Court of India held that Section 16G of Tea Act, 1953 was overridden by Section 238 of IBC, 

• iv) Innovative Industries Limited v. ICICI Bank reported at (2018) 1 SCC 407. The Hon‟ble Supreme Court of India held that non-obstante clause of IBC would prevail over the Maharashtra Relief Undertaking (Special Provisions) Act, 1958, 

• v) Principal CIT v. Monet Ispat and Energy Limited reported at (2018) 18 SCC 786. The Hon‟ble Supreme Court of India held that nonobstante clause of IBC would prevail over the Income Tax Act, 1961, 

• vi) Assistant Director, Enforcement Directorate v. Raj Kumar Ralhan, Resolution Professional reported at 2019 SCC Online NCLT 30928. The National Company Tribunal, inter alia, held that (i) moratorium declared under  Section 14 of IBC was applicable to proceedings under the FEMA, ii) the Enforcement Directorate could not proceed against the corporate debtor as long as moratorium under IBC was in force, and iii) if under the provisions of the FEMA, if any of the Directors/Officers were individually liable for any actions done prior to the commencement of CIRP, the applicant might proceed against those Directors/Officers of the corporate debtor.

# 3. Learned counsel for the respondent ED submitted as follows. That the petitioner as Liquidator of M/s. Shree Ganesh Jewellery House (I) Ltd. preferred the present writ petition before this Court and prayed for quashing of Notice dated 30.11.2022 and Notice dated 30.01.2023. Annexure-P3 to the writ petition was an Order of Seizure issued by the respondent no. 2 herein under Section 37A(1) of Foreign Exchange Management Act, 1999. In the present case, Accused/Corporate Debtor failed to realise export proceeds to the tune of Rs.7220,89,57,496/- and thereby contravened Section 4 of FEMA, 1999. Accordingly, under the said Annexure P3, the Respondent No.2 herein i.e. the Authorised Officer seized 39 immovable properties of Accused/Corporate Debtor, amongst total 49 immovable properties having market value of Rs.138,35,60,746 and 4 Bank Accounts, being movable properties of Accused/ Corporate Debtor having balance as on 16.04.2019 of Rs.3,40,23,401/-. As the petitioner was the Liquidator of Accused/ Corporate Debtor, he prima facie could not have any jurisdiction even to pray for quashing and/or setting aside whole of the Annexure P-3, which also involved seizure of immovable properties not belonging to the Accused/ Corporate Debtor. Annexure-P4 was nothing but notice of personal hearing  before the Competent Authority in compliance to Section 37A (3) of FEMA,

1999 in pursuance to petition under Section 37A (2) of FEMA, 1999. The said Annexure-P4 being in compliance to statutory provision could not be questioned by the petitioner. The writ petition deserved to be dismissed on the ground of suppression of material fact that the proceeding instituted against Accused/Corporate Debtor under FEMA, 1999 vide File No. T-3/ Misc./37/ KOL/2016/AD(AKS) dated 15.11.2016 had been culminated into Complaint dated 06.07.2020 for contravention of provision of Sections 3(b), 4, 7 and 8 of FEMA, 1999 read with Regulation 8 and 9 of Foreign Exchange Management (Export) of Goods and Services) Regulations, 2015 r/w Section 4 of FEMA, 1999 which attracted imposition of penalty under Section 13 of FEMA, 1999 when, in turn, the Adjudicating Authority issued Show Cause Notice dated 06.07.2020 in terms of Rule 4(1) of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 and further fact of pendency of Appeal being No. FPA-PMLA-3332/KOL/2019 together with stay petition No. MP-PMLA-6636/KOL/2019 before the Ld. Appellate Tribunal against Order dated 09.10.2019 passed by the Adjudicating Authority under Section 8 of PMLA, 2002 in Original Complaint No. 1146 of 2019 thereby not confirming the attachment of properties of Accused/ Corporate Debtor under PMLA, 2002. On the contrary, in the writ petition, the petitioner mis-stated before this Court that the Central Government was trying to attach the same properties in circuitous way and the respondent no. 2 maliciously sought to do indirectly what he could not achieve directly in the PMLA proceeding. Annexure-P3 to writ petition was nothing but an intermediate action in order to protect the Interest of Revenue and the aggrieved person had always a right of appeal against the Order passed under Section 37A(3) of the FEMA, 1999 and from the Affidavit-in-Opposition of the respondents and Affidavit-in-Reply of the petitioner, it was evident that against the Order dated 23.05.2023 passed by the Competent Authority under Section 37A(3) of the FEMA, 1999, the petitioner had already preferred an appeal before the Appellate Tribunal under the SAFEMA at New Delhi with the prayer for setting aside of the Order dated 23.05.2023 confirming the Seizure Order dated 30.11.2022 i.e., Annexure P3 herein. The Tribunal vide Order dated 20.09.2023 ordered for maintenance of status quo with regard to properties of Accused/ Corporate Debtor i.e., respondent no. 1 there at. The petitioner failed to substantiate his suppression of facts before this Court and on the contrary, brought on-record the Order dated 20.09.2023 (supra) of the Tribunal, which further established that material facts were suppressed in the writ petition. When the petitioner herein had already availed the statutory opportunity of appeal against the Order dated 23.05.2023 passed by the Competent Authority under Section 37A(3) of the FEMA, 1999 thereby confirming the Order of Seizure dated 30.11.2022, this Court should not entertain the writ petition on merits. Section 43 of the FEMA, 1999 provided that any right/obligation/ liability in a proceeding or appeal arising in relation to the provisions of Section 13 should not abate by reason of death or insolvency of the person liable under that Section and upon such death or insolvency. Such rights and obligations should devolve on the legal representative of such person or the official receiver or the official assignee, as the case might be. In the present case, proceeding relating to Section 13 of the FEMA, 1999 was pending against Accused/ Corporate Debtor under SCN dated 06.07.2022 and as such, the legal representative or official receiver of Accused/Corporate Debtor even in case of insolvency should not be devolved from the rights and obligations arising from that proceeding. It was the case of the petitioner that Annexure P3 could not even passed in view of Section 33(5) of the Insolvency & Bankruptcy Code, 2016. Section 33(5) of the IBC, 2016 provided that no suit or legal proceeding should be instituted by or against the corporate debtor when a liquidation order had been passed. In the present case, admittedly, Liquidation Order was passed on 14.09.2018 by the NCLT, Kolkata Bench, whereas, the proceeding against Accused/Corporate Debtor under the FEMA, 1999 was initiated on 15.11.2016 i.e., much prior to such order of liquidation and hence, no bar u/s 33(5) of the IBC, 2016 was applicable in the present case. Annexure-P3 issued u/s 37A(1) of the FEMA, 1999 was an intermediate action in the said proceeding under the FEMA, 1999 against the Accused/Corporation Debtor. Section 32A(2) of the IBC, 2016, as referred to on behalf of the petitioner, did not also debar the action of the respondent no. 2 herein in issuing the Annexure-P3 herein. Section 32A(2) ibid was disjunctive in nature with respect to the approved resolution plan and sale of liquidation assets to a person by the word „or‟. With respect to sale of liquidation of assets to a person the provision, thus, provided that no action shall be taken against the property of the corporate debtor in relation to an offence committed prior to commencement of the corporate insolvency resolution process of the corporate debtor, where such property was covered under a sale of liquidation asset under the provisions of Chapter 3 of Part-II of the IBC to a person who was not a promoter or in the management or control of the corporate debtor or a related party of such person or had not abetted or conspired for the commission of the offence. In other words, unless the „property‟ sold to „a person‟ as part of „liquidation assets‟, bar under Section 32A(2) of the IBC, 2016 cannot came into play. In the present case, admittedly, the petitioner before this Hon‟ble Court was the liquidator and not „a person‟ to whom there was „sale‟ of any „property‟ of Accused/Corporate Debtor as part of „liquidation assets‟ and the „action‟ with respect to such „property‟ of Accused/Corporate Debtor had been taken by the respondent no. 2 herein on 30.11.2022 i.e., prior to such „sale of liquidation assets‟ „to a person‟. Hence, the action of respondent no. 2 herein could not be held as barred u/s 32A of the IBC, 2016.

# 4. I heard the learned counsels for the parties and perused the writ petitions, the affidavits and the written notes of submissions.

# 5. Admittedly, the CIRP for Shree Ganesh commenced on 12.02.2018 pursuant to an order passed by the NCLT at Kolkata under the provisions of the IBC. Section 14 of the IBC prohibits the initiation of suits or continuation of pending suits or proceedings against the corporate debtor following the initiation of CIRP. On 14.09.2018 the NCLT directed that Shree Ganesh should be liquidated. Furthermore, the writ petitioner was appointed as a liquidator. Incidentally, the proceeding against the corporate debtor/accused under the FEMA was initiated on 15.11.2016. 

# 6. The mere fact that the proceeding under the FEMA was initiated in 2016 before Section 14 of the IBC came into operation in 2018 would be irrelevant as Section 14 speaks not only about the initiation, but also about the continuation of pending suits or proceedings.

# 7. Once an order for liquidation was passed, as in the instant case, Section 33(5) provides that subject to Section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by the liquidator on behalf of the corporate debtor with the prior approval of the Adjudicating Authority.

# 8. As has rightly been contended on behalf of the petitioner, what was contemplated in a CIRP was the approval of a Resolution Plan. After liquidation order, the corporate debtor might be sold as a going concern or the assets might be sold. Therefore, once CIRP was admitted, the assets on corporate debtor could not be attached. They would be sold in CIRP or in liquidation.

# 9. Section 32A(2) of the IBC provides for more. According to it, no action will be taken against property of the corporate debtor in relation to any offence committed prior to the commencement of the CIRP.

# 10. While the PMLA came into force in 2002, the IBC came into existence in 2016. In Ramsarup Industries Limited (supra) and Others, the Hon‟ble Supreme Court held that the provisions of the IBC would override the provisions of the FEMA. Therefore, the moratorium under the IBC would override the provisions of the FEMA. Not only was the IBC enacted while the FEMA was in existence, but Section 238 of the IBC also clearly provided for a non-obstante clause. On the other hand, FEMA did not have such non obstante clause. In this regard, reliance was placed on behalf of the petitioner on Paschimanchal Viduyt Vitran Nigam Ltd. (supra), Sundaresh Bhatt, Liquidator of ABG Shipyard (supra), Duncans Industries Limited (supra), Innovative Industries Limited (supra), Principal CIT vs. Monet Ispat and Energy Limited (supra) where the IBC was permitted to override the corresponding provisions of the Electricity Act, 2003, the Customs Act, 1962, the Tea Act, 1953, the Maharashtra Relief Undertaking (Special Provisions) Act, 1958 and the Income Tax Act, 1961.

# 11. In Assistant Director, ED vs. Raj Kumar Ralhan, the NCLT held that moratorium declared under Section 14 of the IBC was applicable to proceedings under the FEMA. The Enforcement Directorate could not proceed against the corporate debtor as long as moratorium under the IBC was in force. If any of the Directors/Officers were individually liable for any actions done prior to the commencement of the CIRP, the applicant might proceed against those Directors/Officers.

# 12. As was contended on behalf of the petitioners, the issuance of the provisional seizure order was in disregard of the moratorium prescribed in Section 33(5) of the IBC. So was the issuance of the notice. It was further contended that during pendency of the writ petition, the respondent no. 3 on 23.05.2023 confirmed the provisional seizure order. Therefore, the order dated 23.05.2023 was subject to the result of the writ petition. The petitioner has also sought to explain the reason for filing an appeal before the Appellate Tribunal stating that the same was in view of the applicable limitation period.

# 13. As has been held by the Hon‟ble Apex Court in a catena of decisions, the provisions of the IBC would override the provisions of other Acts like the FEMA. Section 238 is very strongly worded indeed.

# 14. In view of the proceedings pending under the IBC and the orders passed therein, the impugned provisional seizure order and the impugned notices could not have been issued. Therefore, the impugned notices are quashed. However, a proceeding can fairly be initiated against the erstwhile Director and the Officer of the corporate debtor, if they are found to be individually liable.

# 15. Accordingly, the writ petition is allowed.

# 16. Urgent Photostat certified copy of this order, if applied for, be given to the parties, upon completion of requisite formalities.

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Amier Hamsa Ali Abbas Rawther, vs Chairman Cum Managing Director, NLC India Ltd. - That the proceedings under the I&B Code is not a recovery proceeding and that too for the recovery of an amount which is disputed and arising out of contractual obligation contained in the terms of contract, which itself provided a mechanism for redressal of the dispute by agitating the same before the Arbitrator.

 NCLAT (2025.04.30) in Amier Hamsa Ali Abbas Rawther, vs Chairman Cum Managing Director, NLC India Ltd. [(2025) ibclaw.in 310 NCLAT, Company Appeal (AT) (CH) (Ins) No. 213/2025] held that.

• That the proceedings under the I&B Code is not a recovery proceeding and that too for the recovery of an amount which is disputed and arising out of contractual obligation contained in the terms of contract, which itself provided a mechanism for redressal of the dispute by agitating the same before the Arbitrator.

Excerpts of the Order;

# 1. The Appellant herein was an Applicant, to IA(IBC)/1618/CHE/2024, as it was preferred in CP(IB)/25(CHE)2022, before the Learned NCLT, Chennai. In the IA thus preferred by the Appellant, he had sought the following prayers: –

“Direct the Respondent to pay Rs. 40,98,41,115.76 towards:

ⅰ) Substation Maintenance charges of Rs.2,49,74,700 incurred the Corporate Debtor on behalf of the Respondent for evacuating power produced by the windmills of the Respondent; Performance Bank Guarantee of Rs.40.00.000 by the Respondent after the contract

ii) The unauthorized invocation of the period expiry and during the liquidation process of the Corporate Debtor;

iii) Retention amount of Rs.33.25 Crores of the Project Contract Amount by the Respondent despite completion of the project; and

iv) The unpaid invoices aggregating to issued by the Corporate Debtor to the Respondent for the O & M Contract. Rs.4,83,66,415:76 were issued by the Corporate Debtor to the Respondent for the O & M Contract.

B. To Pass any other order/orders that this Hon’ble Tribunal may deem fit and proper.

C. To direct the Respondent to pay a sum of Rs 50,000/- towards the cost of this Application.” 

# 2. During the course of the argument, what has been reflected from records and arguments is that the Appellant submits that there had been an execution of a contract for a project on 15.11.2013, between the NLC India Ltd. and LSML (India) Pvt. Ltd. pertaining to the erection, commissioning, testing and subsequent operation and maintenance of 34 units of 1.5 mw wind turbine generators, at Kaluneer Kulam, in the state of Tamilnadu, that the maintenance clause under the contract, was for a period of 5 years, which would be covering the warranty period too, in that on account of failure on the part of the Respondent NLC India Ltd in fulfilling the covenants of the contract and their financial commitments including timely release of payment for the work done the Appellant could not pay its suppliers and creditors and defaulted on its credit obligations leading to insolvency and subsequent liquidation of the Corporate Debtor (CD).

# 3. Owing to non-fulfilment of certain contractual obligations by the Respondent and also because of force-majeure condition, the Corporate Debtor suffered financial loss, which consequently affected the payment schedule to the suppliers of the Corporate Debtor leading to the default committed by the Corporate Debtor, on its credit obligations. This resulted into initiation of the insolvency process; a moratorium was declared by an order of 14.10.2022, by an order as it was passed in CP(IB)/25(CHE)2022, appointing the Resolution Professional. As no resolution plan was approved, liquidation of the Corporate Debtor was ordered on 12.10.2023 and the liquidator was appointed. The Appellant is the second liquidator, appointed on 30.11.2023.

# 4. After taking over, the Appellant identified certain receivables from the Respondent and sent notice for payment of the said amount to the Respondent. As per his submission and as per the notice sent, the total amount receivable from NLC India is Rs.40,98,41,115.76 and as the Respondent denied to pay the same, the Appellant filed an Application vide IA/1618/2024 before Learned NCLT, Chennai.

# 5. The said application was taken up for consideration before the Learned Tribunal and the Tribunal after observing that the Respondent has stated that nothing is payable to the Corporate Debtor as per the terms of the contract, that the amount claimed by the Appellant is disputed and that the issue raised is a triable issue which cannot be denied by it having summary jurisdiction, dismissed the Application giving liberty to the Appellant to approach appropriate forum for recovery of the claims thus raised.

# 6. The Learned Tribunal while considering the aforesaid application being, IA(IBC)/1618/CHE/2024, taking into consideration that since no other dispute is pending consideration, coupled with the fact that as per records no amount was payable to the appellant/applicant besides that since no proceedings were pending consideration, except for IA(IBC)/1618/CHE/2024, as preferred by the present Appellant, which was an attempt made to enforce upon the contractual obligations, arising from the contract dated 15.11.2013, which contained an Arbitration Clause. Though the copy of contract is not on record in the Appeal but the Learned Counsel for the Appellant has submitted that the dispute pertaining to the maintenance charges, arises out of the work executed under the terms of the contract and that as per the admission of the Appellant, since, the contract contained an Arbitration Clause, which provided for the disputes redressal forum to be agitated before the arbitrator to be appointed in accordance with the process contemplated under the contract. The Tribunal observed that since it was a triable issue, which engages consideration of fact and which could only be settled after establishment of the liability of payment of maintenance charges and other claims raised by him, which requires determination, it may not be falling to be considered within the ambit of the provisions of the I&B Code. The contentions of Learned Adjudicating Authority cannot be faulted because: –

• i) The forum under the I&B Code, is not a forum, which could be abused to be resorted to as a substitute to the determination and recovery of dues.

• ii) The terms and conditions as agreed between the Appellant and the Corporate Debtor was governed by the terms of the contract, which contained within it an Arbitration Clause, and therefore the appropriate recourse which would be available to the Appellant, would be to approach the appropriate forum as agreed between the parties under the terms of the contract.

• iii) Since the amount is disputed and it requires submission of elaborate evidence for the establishment of the claims thus raised, it can only be decided by the forum as agreed between the parties.

# 7. Hence, the Tribunal concluded that the relief sought for in the interlocutory application may not be tenable under the I&B Code, and that, for redressal of the grievances qua the relief claimed in the said application the Appellant will have to approach the designated forum for a resolution of the said dispute between the parties and hence the Tribunal had rightly after considering the contention, has observed that the application would not lie before it and rather the Appellant should resort to the proceedings, as available to him, in accordance with law, and agitate his grievances by approaching before the appropriate forum for the recovery of the alleged amount due to be paid as prayed for in the relief clause as IA(IBC)/1618/CHE/2024. The logic, which has been assigned by the Tribunal for rejecting the IA seems to be absolutely justified for the reasons given above that the proceedings under the I&B Code is not a recovery proceeding and that too for the recovery of an amount which is disputed and arising out of contractual obligation contained in the terms of contract, which itself provided a mechanism for redressal of the dispute by agitating the same before the Arbitrator. Hence, the reason, which has been given in the Impugned Order does not suffer from any error which could call for any interference by this Appellate Tribunal in exercise of its appellate jurisdiction under Section 61 of I&B Code. The Company Appeal lacks merit and the same is dismissed.

# 8. All pending interlocutory applications would stand closed. 

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Sarla Performance Fibres Ltd. Vs. Vivek Murlidhar Dabhade - Onerous contract is one where there are costs involved in meeting the obligations under the contract and there are outflows of resources which are much higher than the economic benefits received under it.

 NCLAT (2025.04.24) in Sarla Performance Fibres Ltd. Vs. Vivek Murlidhar Dabhade [(2025) ibclaw.in 290 NCLAT, Company Appeal (AT) (Insolvency) No. 379 – 381 of 2025] held that.

• Onerous contract is one where there are costs involved in meeting the obligations under the contract and there are outflows of resources which are much higher than the economic benefits received under it.

• It must be remembered that an order permitting disclaimer, while it frees the company in liquidation of the obligation to comply with covenants, puts the party in whose favour the covenants are, to serious disadvantage. The Court must therefore, be fully satisfied that there are onerous covenants, covenants which impose a heavy burden upon the company in liquidation, before giving leave to disclaim them.

Excerpts of the Order;

These three appeals have been filed, challenging the common order dated 03.02.2025 passed by the adjudicating authority (National Company Law Tribunal, Mumbai Bench, Court–III) in I.A. No.2012/2022 filed by the liquidator, I.A. No.2897/2023 & I.A. No.672/2023 filed by the appellant. By the impugned order, adjudicating authority disposed of all the three applications, aggrieved by which order, these appeals have been filed.

# 2. Brief facts of the case necessary to be noticed for deciding the appeals are:

i. Corporate debtor owns the piece and parcel of land building survey number 60/1/1, admeasuring 1000 sq. mt. along with factory shed/building consisting of ground floor and first floor situated at village Amli of Union Territory of Dadra and Nagar Haveli.

ii. An application for initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor M/s. Desimran Cartons Private Ltd. was filed by Jalgaon Janta Sahakari Bank Ltd. under Section 7 of the Insolvency and Bankruptcy Code (for shot the ‘Code’ or the ‘IBC’) on 08.05.2019.

iii. On 07.06.2019, corporate debtor entered into Leave and License Agreement dated 07.06.2019 with the appellant at the rent of Rs.5,000 for a term of 12 years up to 31.05.2031. The bank had existing mortgage on the assets, consent of which bank was required for transferring the assets.

iv. CIRP against the corporate debtor commenced on 28.03.2022. No resolution plan having been received, on order dated 28.03.2022 was passed by the adjudicating authority directing liquidation of the corporate debtor.

v. Liquidator informed the appellant about the liquidation proceeding and asked the appellant to enter into a fresh Leave and License Agreement in respect of the said premises.

vi. Appellant did not respond to the letter of the liquidator, hence vide letter dated 18.05.2022, liquidator asked the appellant to vacate the premises. Appellant filed its claim before the liquidator, which was not accepted by the liquidator being not in accordance with the prescribed format.

vii. Liquidator filed an I.A. 2012/2022 seeking to disclaim the Leave and License Agreement under Regulation 10 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

viii. On 21.01.2023, liquidator issued a public notice to auction the said premises on “as is where is basis”. Appellant filed I.A.672/2023 praying for quashing the public notice dated 21.01.2023. Appellant also filed an I.A. No.2897/2023, challenging the decision of the liquidator to reject the claim of the appellant.

ix. Adjudicating authority vide order dated 23.03.2023 directed the liquidator to go ahead with the auction process but prevented the liquidator from evicting the appellant until further orders in event the auction is successfully completed. Auction was successfully held for the assets for amount of Rs.4.21 crore. Adjudicating Authority by the impugned order held that I.A. No.2012/2022 filed by the liquidator deserves to be allowed and the Leave and License Agreement need to be disclaimed.

x. Application filed by appellant I.A. No.672/2023 challenging the auction notice was dismissed, whereas, I.A. No.2897/2023 filed by the appellant challenging rejection of its claim has been allowed, and a liquidator was directed to reconsider the claim of Rs.1,15,00,000/- submitted by appellant and decide the same after due verification. Consequently, I.A. No.2012/2022 was allowed partly.

xi. Aggrieved by the aforesaid common order passed in three applications by the adjudicating authority, these three appeals have been filed.

# 3. We have heard Learned Sr. Counsel, Mr. Shyam Mehta appearing for the appellant and learned counsel, Mr. Rohit Gupta appearing for the liquidator.

# 4. Learned counsel for the appellant challenging the order submits that Leave and License Agreement was not an onerous contract. Appellant had entered into agreement to sell with the corporate debtor on 16.04.2019 and has paid an amount of Rs.40 lakhs. It is submitted that appellant has also given refundable security deposits of Rs.60 lakhs between 06.05.2019 to 07.06.2019. It is submitted that two separate orders were passed by Ld. Technical Member and Judicial Member. Ld. Member Technical has found the Leave and License Agreement to be onerous contract, whereas Ld. Judicial Member has not found the Leave and License Agreement as an onerous contract rather Ld. Judicial Member has only held that contract is unprofitable. It is submitted that thee being divergent opinion between the decision of both the Members, application filed by liquidator being I.A. No. 2012/2022 could not have been allowed. It is submitted that reference of illustration 10 as by Member Judicial is not part of Regulation 10 of the Liquidation Regulation, 2016. Ld. Member Judicial has not provided any reason as to why the Leave and License Agreement allegedly is unprofitable contract. Appellant having paid an amount of Rs.60 lakhs + Rs.50 lakhs i.e., Rs.1,15,00,000/- in furtherance of agreement of sale dated 06.04.2019 and Leave and License Agreement dated 07.06.2019, the Leave and License Agreement could not be held to be onerous agreement. Learned counsel for the appellant submits that Regulation 10 of the Liquidation Regulation 2016 goes beyond the IBC Code and is totally inconsistent with the code. Under the code only transaction which can be avoided by the liquidator are preferential transaction, undervalued transaction and transaction defrauding creditors and extortionate transaction in accordance with the provisions of Section 43 to 51 of the Code. There is no reference to any other transaction, hence Regulation 10 of the Liquidation Regulation, 2016, seeks to create new category of contract, which may be avoided by the liquidator which is not covered by any of the provisions of the Code. The above is clearly impermissible and to that extent Regulation 10 is ultra vires to the code and therefore ineffective and liable to be ignored. 

# 5. Learned counsel for the liquidator refuting the submissions of the appellant submits that there was sufficient material on the record to come to the conclusion that Leave and License Agreement dated 07.06.2019 was an onerous transaction. It is submitted that the corporate debtor entered into the said transaction after the application was filed by the bank against the corporate debtor on 08.05.2019. It is submitted that corporate debtor entered into Leave and License Agreement at the rent of Rs.5,000/- for a term of 12 years, which rent was not in accordance with the market rate. Liquidator wrote to the appellant to enter into fresh Leave and License Agreement to which initially no response was given by the appellant and subsequently appellant send a response that appellant is ready to enter into Leave and License Agreement for an amount of Rs.2,25,000/- p.m., which clearly indicate that the rent on which Leave and License Agreement was entered for Rs.5,000/- p.m. was wholly inappropriate and unprofitable. The transaction entered by corporate debtor was not bona fide transaction. Transaction was clearly undervalued transaction. The liquidator was well within his right to terminate the Leave and License Agreement. The corporate debtor has already been sold for an amount of Rs.4.21 crore. Insofar as the claim of the appellant is concerned, the adjudicating authority has already directed for consideration of claim of Rs.1,15,00,000/- of the appellant. It is submitted that there is no divergence of opinion between the Technical Member and the Judicial Member. Both the Members were in agreement, that the transaction is fully covered by Regulation 10 of the Liquidation Regulation, 2016, hence deserves to be disclaimed by the liquidator. 

# 6. We have considered the submissions of counsel for the parties and perused the records.

# 7. In the present case, the application was filed by the liquidator being I.A. No.2012/2022 both under Section 45 of the IBC as well as Regulation 10 of the Liquidation Regulations, 2016. The prayers made in the I.A. No.2012/2022 has been extracted by the adjudicating authority in paragraph 1 of the order, which is as follows:

• “a) To disclaim the Leave and License Agreement dated 07 June 2019 which was registered at the Serial No 2930 of 2019 at the office of Sub-registrar of Dadar & Nagar Haveli, Silvassa as being in the nature of an onerous contract in terms of Regulation 10 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016;

• b) To classify the transactions undertaken under the said Agreement as being undervalued in terms of Section 45(1) of the IBC, 2016;

• c) To direct the Respondent to make contributions to the assets of the Corporate Debtor by directing the Respondents to pay the amount of Rs.2,51,73,573/- in terms of Section 48(1) of the IBC, 2016;

• d) To pass such other orders as may deem just and proper by this Bench.”

# 8. The adjudicating authority has allowed the said application by the impugned order, aggrieved by which the appellant has come up in this appeal.

# 9. Adjudicating authority while considering the said IA has held that transaction is not covered by Section 45 of the IBC. Hon’ble Technical Member in its order has framed two questions in paragraph 28.1 of the order which is as follows: 

• “28.1 The said application filed by Liquidator raises two issues:

• i. Whether the transactions under the Leave and License Agreement dated 07.06.2019 are undervalued transactions as defined under section 45 of the Code?

• ii. Whether the Leave and License Agreement is onerous and shall be allowed to be disclaimed under Regulation 10 of Liquidation Regulations?”

# 10. As noted above, adjudicating authority held that Section 45 is not applicable. Prayers (b) & (c) of the IA was thus rejected. In paragraph 28.3, Ld. Technical Member proceeded to examine the transaction under the head “onerous contract”. Adjudicating authority after referring to the facts and circumstances and has recorded its conclusion in paragraphs (xx), (xxvii) and (xxviii), which are as follows:

• “xx. As held above, the intention of disclaiming a contract or property as onerous is to protect the creditors of the Corporate Debtor and releasing the Corporate Debtor from a heavy burden imposed by such a contract or property. It can be seen from the terms of the agreement itself that the said agreement is not beneficial to the Corporate Debtor and its creditors since it is unprofitable considering the fact that a meagre amount of Rs. 5000 for first 5 years and Rs. 7000 thereafter has been agreed as monthly rent. The advance security payment of Rs. 60,00,000 and the advance payment of Rs. 55,00,000 paid by Sarla gives no benefit to the creditors during liquidation since the amount has been admittedly already utilized by the erstwhile management of the Corporate Debtor.

• xxvii. In the peculiar facts and circumstances of the present case, we are satisfied that the leave and license agreement dated 07.06.2019 is ‘unprofitable’ and ‘burdensome’ and attracts the provisions under Regulation 10 of the Liquidation Regulations, 2016.

• xxviii. Thus, for the reasons recorded above, prayer ‘a’ in IA/2012/2022 is allowed and the Liquidator is allowed to disclaim, from the date of disclaimer notice issued to Sarla, the leave and license agreement as ‘onerous property’ (unprofitable contract) under Regulation 10 of the Liquidation Regulations. Further, the licensee, i.e. Sarla Performance Fibers Limited is directed to vacate the said premises within a period of 30 days from the date of this order.”

# 11. Ld. Judicial Member also has proceeded to consider the application of the liquidator seeking declaration of the transaction as onerous. Judicial Member has also come to the conclusion that transaction is unprofitable transaction and is covered by Regulation 10 of the Liquidation Regulations, 2016.

# 12. As noted above, two principal submissions have been advanced by the appellant challenging the impugned order; firstly, there is no divergence of the opinion between the parties holding the transaction as onerous under Regulation 10 of the Liquidation Regulations, 2016, hence the order allowing the I.A. No.2012/2022 is unsustainable; and secondly, the Regulation 10 of the Liquidation Regulations, 2016 is beyond the provisions of the IBC and ultra vires to IBC, hence is an unenforceable.

# 13. The first submission of the appellant is regarding divergence of opinion between the two judgements delivered by the Hon’ble Technical Member and Judicial Member. Judicial Member after considering the submissions of the parties and noticing all relevant facts have come to the conclusion that Leave and License Agreement 07.06.2019 is unprofitable and burdensome and affects the provision of Regulation 10 of the Liquidation Regulation 2016. The facts as noticed above clearly indicates that Leave and License Agreement was entered for rent of Rs.5,000 p.m. On a letter sent by liquidator asking the appellant to vacate, appellant himself came with the proposal that he is ready to enter into Leave and License Agreement for amount of Rs.2.25 lakhs p.m. The assets which consists of area of 1000 sq. mt. with two constructed floors measuring 545.22 sq. mt. each. No exception can be taken to the finding of the adjudicating authority that Leave and License Agreement was unprofitable and not a bona fide transaction. The submission which has been pressed by the appellant is that although Technical Member has declared the transaction to be covered by Regulation 10 of the Liquidation Regulations, 2016, however, the Ld. Judicial Member has not found the transaction as onerous. One of the submissions of the appellant is also that illustration 10 as referred to by Ld. Judicial Member is not there in regulation 10. Illustration 10, which has been extracted by the Ld. Judicial Member in paragraph 8 of the order was illustration of Accounting Standard, AS 29. In paragraphs 7 and 8 of the order adjudicating authority has referred to the Accounting Standard and illustration 10, which are as follows:

• “7. However, section 129 of the Companies Act, 2013 provides that the financial statements shall comply with the accounting standards notified under the section 133. Under section 133 the Central Government has prescribed the standards of accounting recommended by the Institute of Chartered Accountants of India. The Institute of Chartered Accountants of India have issued Accounting Standard (AS) including AS 29. We find that ‘onerous contract’ has been explained under Accounting Standard (AS) 29.

• 8. AS 29 is relating to Provisions, Contingent Liabilities and Contingent Assets and provides as follows:

• “Scope

• This Standard should be applied in accounting for provisions and contingent liabilities and in dealing with contingent assets, except: (a) those resulting from financial instruments2 that are carried at fair value;

• (b) those resulting from executory contracts, except where the contract is onerous;

• Explanation:

• (i) An ‘onerous contract’ is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Thus, for a contract to qualify as an onerous contract, the unavoidable costs of meeting the obligation under the contract should exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.

• (ii) If an enterprise has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision as per this Standard. The application of the above explanation is illustrated in Illustration 10 of Illustration C attached to the Standard.

• Illustration C

• Illustration 10: An Onerous Contract

• An enterprise operates profitably from a factory that it has leased under an operating lease. During December 2005 the enterprise relocates its operations to a new factory. The lease on the old factory continues for the next four years, it cannot be cancelled and the factory cannot be re-let to another user.

• Present obligation as a result of a past obligating event-The obligating event occurs when the lease contract becomes binding on the enterprise, which gives rise to a legal obligation.

• An outflow of resources embodying economic benefits in settlement- When the lease becomes onerous, an outflow of resources embodying economic benefits is probable, (Until the lease becomes onerous, the enterprise accounts for the lease under AS 19, Leases).

• Conclusion-A provision is recognised for the best estimate of the unavoidable lease payments”

# 14. The Ld. Judicial Member thus has never held that illustration 10 is part of Regulation 10. In paragraph 10 of the order, Ld. Judicial Member has recorded its following conclusion:

• “10. Thus, from the bare reading of the accounting standards it can be seen that an onerous contract is one where there are costs involved in meeting the obligations under the contract and there are outflows of resources which are much higher than the economic benefits received under it. Under the present L&L Agreement, there are no costs or outflows of resources of the Corporate Debtor involved in fulfilling any obligation towards the Licensee. Therefore, even though in the strict sense, the L&L Agreement may not fall under the phrase ‘onerous contract’ as sought by the Liquidator yet I tend to agree with Ld. Brother, Member (Technical) that it may be covered under the ‘unprofitable contract’ as one of the illustrations given under the onerous property in Regulation 10 of the Liquidation Regulations because of the reasons discussed in the subsequent paragraphs.”

# 15. When we look into the observations made in paragraph 10, it is clear that Ld. Judicial Member has also held that transaction is covered under unprofitable contract. Regulation 10(1)(b), includes unprofitable contracts thus, Judicial Member has also come to the conclusion that transaction is covered by one of the illustrations given under onerous property in Regulation 10. In paragraph 10 Ld. Judicial Member has obviously referred to Regulation 10(1)(d), which mentioned unprofitable contracts which can be basis for disclaimer of onerous property. We, thus do not accept the submission of the appellant that there is divergence of opinion between Technical Member and Judicial Member. Ld. Judicial Member has given detailed reason, including the conduct of the corporate debtor and come to the conclusion that the transaction 07.06.2019 was not bona fide and good faith transaction. In paragraph 19 of the judgement following has been observed by the Ld. Judicial Member:

• “19. Thus, considering facts and circumstances in its entirety and also in view of the fact that Sarla also wanted to take over the management of the Corporate Debtor by submitting EoI and also persuaded the Liquidator to sell the said Premises to Sarla, it is apparent that the Corporate Debtor did not act in good faith while executing the said L&L Agreement of the premises which is the substantial asset of the Corporate Debtor.”

# 16. Ultimately, in paragraph 24, Ld. Judicial Member has also expressed its opinion that it is appropriate to terminate the Leave and License Agreement dated 07.06.2019 i.e., to allow the disclaimer under Regulation 10. Paragraph 24 of the order of the Judicial Member is as follows:

• “24. In view thereof, exercising power under section 60(5) read with section 238 of the I&B Code, 2016, I deem it appropriate to order termination of the said L&L Agreement dated 07.06.2019 to ensure effective and efficient completion of the liquidation process of the Corporate Debtor and to achieve the objective of Code i.e. value maximization. Accordingly, the Leave and License Agreement dated 07.06.2019, which has been disclaimed, stands terminated. Sarla is directed to handover the above Premises to the Liquidator within a period of 30 days.”

# 17. We, thus are of the view that both the Ld. Members have expressed the opinion that transaction of Leave and License Agreement dated 07.06.2019 was an onerous transaction covered under Regulation 10, hence there is no error in partly allowing the I.A.2012/2022 by the adjudicating authority. 

# 18. Now we come to the second submission, the counsel for the appellant submits that Regulation 10 is beyond the provisions of the IBC and is ultra vires to the IBC. Learned Counsel submitted that transaction which can be avoided are enumerated in Sections 43 to 51 and the onerous transaction, which can be disclaimed under Regulation 10 are not covered by any of the above provisions, hence the Regulation 10 provides the remedy which is never contemplated by the IBC, hence the said Regulation 10 is beyond the Code and is totally inconsistent with the Code. It is relevant to notice that power which is vested in Regulation 10 was contemplated in Section 535 of the Companies Act, 1956. The adjudicating authority in paragraph 28.3 (xix) has noted the provisions of Section 535. It is useful to notice paragraph 28.3(xix) of the impugned order, which is as follows:

• “xix. We would like to refer to the judgment of United Bank of India Vs. Official Liquidator & Others (1994) 1 SCC 575 wherein the Hon’ble Supreme Court was dealing with the provisions of section 535 of the Companies Act, 1956 which is pari materia to Regulation 10 of the Liquidation Regulations, 2016, and it was observed as follows:

• “The intention of Section 535 is to protect the creditors of the company in liquidation and not mulct them by reason of onerous covenants. The power under Section 535 is not to be lightly exercised. Due care and circumspection have to be bestowed. It must be remembered that an order permitting disclaimer, while it frees the company in liquidation of the obligation to comply with covenants, puts the party in whose favour the covenants are, to serious disadvantage. The Court must therefore, be fully satisfied that there are onerous covenants, covenants which impose a heavy burden upon the company in liquidation, before giving leave to disclaim them.” 

# 19. Now the question need to be considered as to whether power vested in the liquidator by Regulation 10 of the Liquidation Regulations, 2016, is beyond the IBC. We need to notice Section 34(2), which provides that all powers of board of directors key managerial personnel and partners of the corporate debtor shall vest in the liquidator. Section 34(2) is as follows:

• “34. Appointment of liquidator and fee to be paid

• (2) On the appointment of a liquidator under this section, all powers of the board of directors, key managerial personnel and the partners of the corporate debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator.”

# 20. Section 35 of the IBC provides for powers and duties of the liquidator. Section 35(1)(d) & Section 35(1)(o) are as follows:

• “35. Powers and duties of liquidator.

• (1) Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely:—

• (d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers necessary;

• (o) to perform such other functions as may be specified by the Board.”

# 21. Section 35(1)(o) empowers the liquidator to perform such other functions as may be specified by the board. Expression as specified is defined in Section 3(32), which is as follows:

• “3. In this Code, unless the context otherwise requires,—

• (32) “specified” means specified by regulations made by the Board under this Code and the term “specify” shall be construed accordingly;”

# 22. Regulation 10 of the Liquidation Regulation, 2016, is thus regulation specified and is fully covered by Section 35(1)(o). Liquidation Regulation has been framed in exercise of powers conferred under various sections of the IBC including Section 34 and Section 35, thus regulations have been clearly framed under Section 35 and as per Section 35(1)(o) liquidator can perform such other function as maybe specified by the board. The power vested in the liquidator by Regulation 10 i.e., disclaimer of the onerous property is thus fully covered by provisions of the IBC and cannot be held to be beyond IBC or ultra vires to the IBC as contented by counsel for the appellant. We may also refer to Section 240(2) of the IBC, which provides for power to make a regulation. Section 240(2)(y) provides as follows.

• “240. Power to make regulations.

• (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:—

• (y) the manner of evaluating the assets and property of the corporate debtor under clause (c), the manner of selling property in parcels under clause (f), the manner of reporting progress of the liquidation process under clause (n), and the other functions to be performed under clause (o), of sub-section (1) of section 35;”

# 23. We, thus are of the view that Regulation 10 has been framed in accordance with the provisions of the IBC and the Regulation 10 empowering the liquidator to disclaim a contract is well within the statutory powers and the Regulation 10 is fully inconsonance with and is in accordance with the provisions of the IBC and has been enacted to give effect to the provisions of the IBC. We, thus do not find any substance in the submission of the appellant that Regulation 10 is beyond the provisions of IBC. We, thus do not find any substance in any of the submissions raised by the counsel for the appellant challenging the impugned order, insofar as the application filed by the appellant, I.A.672/2023, the auction having already been held for Rs.4.2 crore, the said application has rightly been rejected by adjudicating authority. Insofar as I.A. No.2897/2023, questioning the decision of the liquidator rejecting the claim, adjudicating authority in paragraph 29.8 issued following directions, while allowing I.A. No.2897/2023:

• “29.8 Thus, we direct the Liquidator to re-consider the claim of Rs. 1,15,00,00 submitted by Sarla and decide on the same after due verification. Sarla is directed to submit its claim in the prescribed format along with proof of claim within 30 days from the date of this order. Accordingly, IA/2897/2023 is allowed.”

# 24. We, thus do not find any error in the order passed by the adjudicating authority while deciding the aforesaid three applications.

There is no merit in the appeals. Appeals are dismissed.

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