Memorial For Respondent R12 Last

TEAM CODE : R12
NATIONAL INSOLVENCY & BANKRUPTCY LAW MOOT COURT

COMPETITION 2024
23rd – 25th February 2024
BEFORE THE HON’BLE SUPREME COURT OF INDIA
SLP Civil) No. 246 Of 2022

Natural Foods Limited ( “NFL” ) ……Petitioner
Versus
Organic Dried Fruits and Spices Private Limited
( “ODFSL” ) ……Respondent
Along with:
W.P. (Civil) No. 135 Of 2022

Versus
Competition Commission Of Xandar & Anr. ……Respondent
Along with:
Civil Appeal No. 567 Of 2023

Versus
State Bank Of Xandar And ORS. ……Respondent
ON SUBMISSION TO THE REGISTRY OF THE COURT OF THE HON’BLE

MEMORIAL FOR THE RESPONDENT – Organic Dried Fruits and Spices Private
Limited (“ODFSL”) , Competition Commission Of Xandar & Anr , State Bank
Of Xandar And ORS.
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[MEMORIAL FOR THE RESPONDENT]
THE NATIONAL INSOLVENCY & BANKRUPTCY LAW MOOT COURT COMPETITION 2024
[TABLE OF CONTENTS]
Contents
STATEMENT OF JURISDICTION..........................................................................................................................1
INDEX OF AUTHORITIES......................................................................................................................................1
STATEMENT OF ISSUES.......................................................................................................................................4
[ARGUMENTS ADVANCED]..................................................................................................................................6
ISSUE 1. Whether it was in the remit of the adjudicating authority to reject the resolution plan
approved by 67% of financial creditors?.........................................................................................................6
1.1. Resolution plan by resolution applicant..............................................................................................6
1.2. Examination by resolution professional..............................................................................................6
Approval or Rejection of resolution plan by Adjudicating Authority...............................................................8
ISSUE 2. Whether the Resolution Applicant in the present case ineligible to submit the Resolution Plan?
9
ISSUE 3. Whether the canvass of moratorium under Section 14 of IBC extends to execution of
international arbitral award, inquiry and proceedings initiated by Securities Board and Competition
Commission?.................................................................................................................................................12
3.1 International Arbitral Award.............................................................................................................12
[ARGUMENTS ADVANCED]................................................................................................................................13
[ARGUMENTS ADVANCED]................................................................................................................................14
3.2 Security Board as Respondent...........................................................................................................14
3.3 Competition Commission as Respondent..........................................................................................15
ISSUE 4. Whether NFL had fraudulently initiated CIRP and has submitted the Resolution Plan at the
behest of a related party in order to seek undue benefit of moratorium in various proceedings and
inquiries pending before other forums.........................................................................................................16
4.1 Conflict of Interest and Related Party Influence................................................................................16
4.2 Undue benefit of the moratorium.....................................................................................................16
4.3 Fraudulent Intent of the Petitioner to seek undue benefit of Moratorium.......................................17
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STATEMENT OF JURISDICTION
The Respondent humbly submits this memorandum in response to the petition filed before this
Hon’ble Supreme Court. The petition invokes its writ jurisdiction under Article 136 and Article
32 of the Constitution of India. It sets forth the facts and the laws on which the claims are
based.
INDEX OF AUTHORITIES
STATUE
Insolvency and Bankruptcy code, 2016 1

Competition Commission Act, 2002 2
Security And Exchange Board Of India Act,1992 3
The Companies Act 2013 4
INDIAN CASES
BALADY SHEKER SHETTY V. AVVAS INFO TECH PVT LTD 8

M2K DEVELOPERS PVT LTD V. RAMCHANDRA D CHAUDHARY 9
ARPAN MAHESH KUMAR SHAH R. PROF. OF OMSHRI DEVPROCON 9
LTD V. COMMITTEE OF CREDITORS
K SASHIDHAR V. INDIAN OVERSEA BANK 10
MITTAL INDIA PVT LTD V. SATISH KUMAR GUPTA AND ORS 11
SWISS RIBBONS PRIVATE LIMITED AND ANR. V. UNION OF INDIA 11
AND ORS
CHITRA SHARMA AND ORS V. UNION OF INDIA AND ORS 12
ARUN KUMAR JAGATRAMKA V. JINDAL STEEL AND POWER LTD 13
BANKM OF BARODA AND ANR. V. MBP INFRASTRUCTURE LTD AND 13
ORS
RBL BANK LTD V. MBL INFRASTRUCTURE LTD 14
Innoventive Industries Ltd. v. ICICI Bank 15
Canara Bank v. Deccan Chronicle Holdings Ltd. 16
Mumbai held in Roofit Industries Ltd 18
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SYNOPSIS OF FACTS
1. Organic Dried Fruits and Spices Private Limited ( ODFSL ) is a company that is involved in
producing dried fruits, nuts, spices And Natural Foods Limited ( NFL ) is a `listed company
based in Xandar, NFL has largest market share for the distribution of dried fruits and spices.
It’s has been largely dependent on imports of dried fruits.
2. There were multiple festivals from October to December in Xandar, Therefore, the demands
for the dried fruits, nuts and spices skyrocketed. To fulfil these demands NFL on 02.09.2022,
placed an order to ODFSL of 10 loads of dried fruits and nuts and 12 loads of spices for total
consideration of INR 10,15,50,000/- and made a sale-purchase agreement with ODFSL.
3. While goods were in transit , on 15.09.2022, NFL placed an another order to ODFSL of 20
loads of dried fruits and nuts, and 10 loads of spices for a total consideration of INR
20,17,30,000/- . with the same terms of previous agreement.
4. To pay the rest of the amount NFL applied for the loan from the State Bank of Xandar and a
consortium of financial institution.
5. In 2022, NFL acquired Connaught Foods Private Limited and after the acquisition NFL’s
business expanded by 15%, by which NFL surpassed Plaza foods.
6. So Plaza foods made filed a complaint to the Competition Commission of Xandar, stating that
NFL has indulged in anti-competitive practices by abusing its dominant position in the
market. Competition Commission of Xandar accepted the complaint and initiated an inquiry
under Section 20 of Competition Act, 2002.
7. NFL could not receive the goods due to lack of funds, NFL intimated to ODFSL Via e-mail
that they will receive the goods soon. In its reply ODFSL stated new terms that if NFL fails to
receive the goods within next 15 days, then ODFSL shall sell the goods to some other buyer
and shall recover all costs and expenses from NFL.
8. NFL could not receive the goods even the after of 15 days, as the result ODFSL sold that
goods to another company but could not sold at the profitable price. Therefore, ODFSL tried
to recover the loss from NFL according to terms of the agreements by the means of mediation
but no response was given by the NFL. Then ODFSL invoked the dispute resolution clause
which was given in the agreement and proceed.
9. NFL initiated the Corporate Insolvency Resolution Process under section 10 of the Insolvency
and Bankruptcy Code, 2016 due to protect the integrity of company and to handle the rising
financial crunch. The application was admitted to the Adjudicating Authority. Accordingly,
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vide order dated 12 .11.2022 moratorium was issued under Section 14 of the Insolvency and
Bankruptcy code, 2016.
10. On 30.11.2022 Arbitral tribunal conclude the proceeding and passed an arbitral award in
favour of the Claimant (ODFSL) directing NFL to compensate ODFSL for loss and injury.
NFL failed to Comply with the directions of the tribunal.
11. ODFSL approached the Hon’ble High court to enforce the arbitral award passed against NFL.
The Hon’ble High Court allowed the execution petition and directed NFL to comply with the
directions of the Tribunal within 15 days.
12. NFL filled a Special Leave Petition [SLP (Civil) No. 246 of 2022] under Article 136 before
the Hon’ble Supreme Court on the Ground of section 14 and it’s extant of IBC. The Hon’ble
Supreme Court issued notice and directed the NFL to file the counter affidavit within 4 (four)
weeks from the date of order.
13. On 13.11.2022, Securities Board provisionally attached an immovable property of NFL and
obtained an order from the special court for the confirmation of such attachment. On
15.11.2022, The Competition Commission directed NFL to pay a penalty of RS. 1 Crore due
to indulged in anti-competitive practice.
14. NFL refused to Comply with both the directions and Filled a writ Petition under Article 32 of
Constitution [W.P. ( Civil ) No. 135 of 2022] to seek direction from the Hon’ble Supreme
Court that all inquiries, investigations and orders shall be stayed.
15. In the Corporate Insolvency Resolution Process, the resolution plan was prepared and
submitted to the Resolution Professional and approved by the financial creditors with the
majority votes of 67%.
16. The resolution plan was submitted before the Adjudicating Authority, the Adjudicating
Authority refused to accept the plan vide its order dated 02.12.2022. The Authority also
directed liquidation of the corporate debtor.
17. NFL filed an appeal under 61 of the IBC before the National Company Law Appellate
Tribunal, however vide order dated 30.12.2022, NCLAT upheld the order dated 02.12.2022
passed by the Adjudicating Authority. Than NFL filed an appeal before the Hon’ble Supreme
Court [Civil Appeal No. 567 of 2023] against the order dated 30.12.2022.
18. The Hon’ble Supreme Court tagged all the three cases filed by NFL before the same bench
for the sake of convenience and brevity.
19. During the pendency of petitions, the Operational creditors filed an invention application the
Civil Appeal No. 567 of 2023 to be impleaded as Respondent.
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STATEMENT OF ISSUES
Issue 1. Whether it was in the remit of the Adjudicating Authority to reject the Resolution Plan approved
by 67% of the Financial Creditors?
Issue 2. Whether the Resolution Applicant in the present case ineligible to submit the Resolution Plan?
Issue 3. Whether the canvass of moratorium under Section 14 of IBC extends to execution of
international arbitral award, inquiry and proceedings initiated by Securities Board and
Competition Commission?
Issue 4. Whether NFL had fraudulently initiated CIRP and has submitted the Resolution Plan at the
behest of a related party in order to seek undue benefit of moratorium in various proceedings and
inquiries pending before other forums.
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[SUMMARY OF ARGUMENTS]
1. Whether it was in the remit of the Adjudicating Authority to reject the Resolution Plan approved by
67% of the financial Creditors?
The counsel for the respondent would like to humbly submit that resolution plan can be rejected
by the Adjudicating Authority approved by Committee of Creditors under Section 30(4) of the
Code on grounds specified under Section 30(2). Hence, it is in the remit of Adjudicating
Authority to reject the resolution plan approved by 67% of financial creditors.
2. Whether the Resolution Applicant in the present case ineligible to submit the
Resolution Plan?
The counsel for the respondent would like to humbly submit that Section 29A, laid down a
multilayered disqualification shield that would disqualify a promoter and a related party from
submitting resolution plan who was responsible for Corporate Insolvency Resolution Process.
The resolution applicant in the present case is ineligible to submit the resolution plan.
3. Whether the canvass of moratorium under Section 14 of IBC extends to execution of

The counsel for the respondent would like to humbly submit that the moratorium under the IBC
directly creates impact on the proceedings of arbitral award, Security Board and Competition
Commission. But the Canvas of execution of above said inquiry and proceedings are subjective.
4. Whether NFL had fraudulently initiated CIRP and has submitted the Resolution Plan
at the behest of a related party in order to seek undue benefit of moratorium in various
proceedings and inquiries pending before other forums.
The counsel for the respondent would like to humbly submit that the NFL at the behest of a
related party who was the ex key management person had initiated the CIRP fraudulently with
considering the interest of investors and operational creditors.
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[ARGUMENTS ADVANCED]
ISSUE 1. Whether it was in the remit of the adjudicating authority to reject the resolution plan
approved by 67% of financial creditors?
1. The counsel for the respondent would like to humbly submit that the adjudicating authority
has jurisdiction only under section 31(2) of the code which gives power to reject the
resolution plan which does not meet the requirements under section 31(1) of the code for
which a reasoned order required to be passed.
1.1. Resolution plan by resolution applicant

1.1.1. Section 30(1) of the Code provides that resolution applicant may submit resolution plan
along with an affidavit stating that he is eligible under section 29A of the Code.1
1.1.2. In the present case, no such affidavit has been submitted by the resolution applicant and
section 30(1) has been violated.
1.2. Examination by resolution professional

1.2.1. The Section 30(2) of the Code provides that resolution professional shall examine each
resolution plan received by him which confirms that each resolution plan-
a. Provides for the payment of insolvency resolution process cost specified by board
in priority to other debts.
b. Provides for the payment of debts of operational creditor shall not be less than the
amount to be paid to such creditor in the event of liquidation of corporate debtor
c. Provides for the management of affairs of corporate debtor
d. The implementation and supervision of the resolution plan
e. Does not contravene any provisions of the law for the time being in force
f. Confirms to such other requirement as may be specified by the Board
1.2.2. In the present case, it is settled out in the committee of creditor’s meeting the payment of
60% Insolvency Resolution Cost will be borne out by the corporate debtor in the priority to all
other debts which violates the provision of Section 30(2)(a)(d)(f) of the Code.2
1.2.3. In the case of BALADY SHEKER SHETTY V. AVVAS INFO TECH PVT LTD 3, The
National Company Law Appellate Tribunal held that resolution plan submitted is uncertain
and conditional and thus cannot be effectively implemented. The resolution plan violates the
1
Insolvency and Bankruptcy act 2016
2
IBC,2016
3
(2023) ibclaw.in 239 NCLT
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Section 30(2) and (f) of the code Therefore, the resolution plan is rejected under Section
31(2).
1.2.4. Further, the Section 53 of the Code states that notwithstanding anything contained in any
other law for the time being in force, the proceeds from the sale of liquidation assets shall be
distributed in the following order of priority and within such period and in such manner as
may be specified namely:
a. the insolvency resolution process costs and the liquidation costs paid in full
1.2.5. In the case of M2K DEVELOPERS PVT LTD V. RAMCHANDRA D CHAUDHARY 4,
The Adjudicating Authority held that it is settled law that conditional resolution plan cannot
be approved under the Code and such resolution plan would diminish the objective for which
the Code was enacted. If at all this resolution plan is approved and cannot be effectively
implemented.
1.3 Resolution plan to be submitted to committee of creditors
1.3.1 As per Section 30(3) of the Code, the resolution professional shall present to the
committee of creditors for its approval such resolution plans which confirm the
conditions referred under Section 30(2).
1.4 Approval by committee of creditors
1.4.1. As per Section 30(4) of the Code, Committee of Creditors may approve a resolution
plan by a vote of not less than sixty-six percent of voting share of financial creditors,
after considering its feasibility and viability, the manner of distribution proposed
including order of priority made under Section 53 of the Code and such other
requirement as may be specified by the Board.
1.4.2. In the case of ARPAN MAHESH KUMAR SHAH R. PROF. OF OMSHRI
DEVPROCON LTD V. COMMITTEE OF CREDITORS 5 in the instant case the
resolution plan was approved by Committee of Creditors with the requisite majority but
rejected by Adjudicating Authority on grounds that resolution plan does not meet the
requirements of Section 30(2) of the Code and plan cannot be implemented and hence
rejected by Adjudicating Authority.
1.5 Submission of approved resolution plan.
The resolution professional shall submit the resolution plan approved by the Committee of
Creditors to the Adjudicating Authority.
4
IA No.42 of 2022 in CP (IB) No.168/BB/2020
5
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Approval or Rejection of resolution plan by Adjudicating Authority

1.5.1 Approval
Section 31(1) provides that if the Adjudicating Authority is satisfied that the resolution plan is
approved by the Committee of Creditors under Section 30(4) meets the requirements as
referred under Section 30(2), it shall by order approve the resolution plan.
1.5.2 Rejection
Section 31(2) states that the Adjudicating Authority is satisfied that the resolution plan does
not confirm to the requirements referred under Section 31(1), it may by an order reject the
resolution plan.
1.5.3 Section 29A of the code lists down the person ineligible to submit resolution plan for a
corporate debtor including promoter and related party of corporate debtor.In the present case
resolution applicant had once held the position of Key Managerial Personnel along with
promoters in the NFL. Hence, the provision of Section 29A has violated.
1.5.4 Further Section 53 of the Code states that notwithstanding anything contained in any
other law for the time being in force, the payment of insolvency resolution process cost shall
be made in priority over other debts. In the present case, Committee of Creditors decided that
the payment of 60% insolvency resolution cost will be borne out by the corporate debtor in
priority to all other debts which violates the Section 53 of the Code.
1.5.5 In case of K SASHIDHAR V. INDIAN OVERSEA BANK 6, it was held that the judicial
scrutiny of the approved resolution plan can only be done under the parameters of Section
30(2) and 31(1) of the Code.
1.5.6 The scope of enquiry and grounds on which the decision of approval of resolution plan
by Committee of Creditors can be interfered with the Adjudicating Authority, has been set out
under Section 31(1) read with Section 30(2) and by appellate tribunal under Section 32 of the
Code.
1.6. The counsel for the respondents would like to humbly submit that the resolution plan does
not comply with the provision of Section 30(2)(a)(d)(e) and (f) of the Code and hence it is
cleared that it was in the remit of Adjudicating Authority to reject to resolution plan approved
by 67% of financial creditors.
6
2019 SCCOnLine SC 257
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ISSUE 2. Whether the Resolution Applicant in the present case ineligible to submit
the Resolution Plan?

2.1 The counsel for the respondent would like to submit that the resolution applicant in the
present case is ineligible under section 29A of the Code.
2.2 The section 29A was inserted in IBC vide amendment effective from 23-11-2017. The
provision lists down the persons ineligible to submit a resolution plan for the Corporate
Debtor including promoters and related party of the Corporate Debtor.
2.3 The underlying purpose of ineligibility under Section 29A, as lucidly elucidated in
ARCELOR MITTAL INDIA PVT LTD V. SATISH KUMAR GUPTA AND ORS. 7 2018 and
SWISS RIBBONS PRIVATE LIMITED AND ANR. V. UNION OF INDIA AND ORS. 8,
2019 is to achieve a sustainable revival and to ensure that a person who is the cause of
problem by design or by default cannot be part of the process of the solution.
2.4 The counsel for the respondent would like to submit that in the present case, the resolution
applicant once held Key Managerial Position of NFL along with the promoter and the
promoter is ineligible to submit resolution plan for the corporate debtor under Section 29A of
IBC. The relevant parts of Section 29A are produced hereunder:
2.5 Section 29A- (c) at the time of submission of the resolution plan has an account, or an account
of a corporate debtor under the management or control of such person or of whom such
person is a promoter, classified as non-performing asset in accordance with the guidelines of
the Reserve Bank of India issued under the Banking Regulation Act, 1949 or the guidelines of
a financial sector regulator issued under any other law for the time being in force, and at least
a period of one year has lapsed from the date of such classification till the date of
commencement of the corporate insolvency resolution process of the corporate debtor.
2.6 (g) has been a promoter or in the management or control of a corporate debtor in which a
preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent
transaction has taken place and in respect of which an order has been made by the
Adjudicating Authority under this Code.
2.7 (j) has a connected person not eligible under clauses (a) to (i)
Explanation For the purposes of this clause, the expression “connected person” means—
i. any person who is the promoter or in the management or control of the resolution applicant;
or
7
SCC,2018
8
WRIT PETITION (CIVIL) NO. 99 OF 2018
9|Page
ii. any person who shall be the promoter or in management or control of the business of the
corporate debtor during the implementation of the resolution plan; or
iii. the holding company, subsidiary company, associate company or related party of a person
referred to in clauses (i) and (ii)
The term Promoter is defined under Section 2(69) of the Companies Act, 2013. Promoter
means a person-
a) Whose name is appearing as a promoter in the prospectus or annual return or
b) Who, directly or indirectly, has the control over affairs of the company either as a
shareholder, director or otherwise or
c) A person in accordance with whose advice, directions or instruction the board of directors
of the company is accustomed to act
2.8 In the present case, the resolution applicant had once held Key Managerial Personnel along
with promoter and held control over the affairs of NFL. Hence, the resolution applicant is
ineligible to submit resolution plan.
2.9 In the case of CHITRA SHARMA AND ORS V. UNION OF INDIA AND ORS 9 giving pre-
eminence to the IBC. The Supreme Court out rightly rejected the resolution plan of Jaiprakash
Associates limited emphasizing on bar under Section 29A of the Code. It was stressed by the
Supreme Court that the person responsible for CIRP cannot be involved in the process of
Insolvency Resolution of corporate debtor, as it would defeat the whole purpose of the Code.
2.10 Generally, promoters are those persons who are responsible for the affairs of the corporate
debtor. Sometimes, the promoters do not perform their duty carefully as a result of which
corporate debtor faces various non-compliances and the situation can be very worst which
leads to insolvency.
2.11 In the present case also the corporate debtor had various non-compliances. Further, with
raising financial crunch and to protect the integrity of the company, NFL initiated CIRP under
Section 10 of the Code. A resolution plan was submitted by a person who once had held Key
Managerial Position of the corporate debtor. The Section 29A provides extensive
disqualification criteria for Resolution applicants enlisting those who are not eligible to
submit a resolution plan. The intention behind inserting Section 29A is to restrict those
persons from submitting a resolution plan who could have an adverse effect on the entire
CIRP.
9
CIVIL APPEAL NO. 6486 of 2019
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2.12 The Judgement of the Supreme Court in ARUN KUMAR JAGATRAMKA V. JINDAL
STEEL AND POWER LTD10 is also relied upon wherein it was held that Section 29A of IBC
is a part of resolution mechanism, the object and purpose is to prevent a backdoor entry to the
promoter who should not be allowed to take advantage of their own wrong.
2.13 Further, in case of BANKM OF BARODA AND ANR. V. MBP INFRASTRUCTURE LTD
AND ORS11., the Supreme Court held that the ultimate object of the code is to put corporate
debtor back on the rail.
2.14 In RBL BANK LTD V. MBL INFRASTRUCTURE LTD 12, The NCLT Bench of Kolkata
specifically looked into meaning and significance of section 29A(h) of the Code. The
guarantors who may be regarded to be excluded from Section 29A(h) of the code and include
those who have antecedents possibly jeopardizing the reliability of the process under the
Code.
2.15 The Section 29A laid down a multilayered disqualification shield that would disqualify
promoters from submitting resolution plan who was responsible for CIRP. The ultimate aim
should always be to revive the corporate debtor and avoid liquidation to preserve the right of
both the corporate debtor and creditors. Hence in the present case, the counsel for the
petitioner would like to humbly submit that the resolution applicant is ineligible to submit the
resolution plan.
10
Civil Appeal No. 9664 of 2019
11
CIVIL APPEAL NO. 8411 OF 2019
12
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ISSUE 3. Whether the canvass of moratorium under Section 14 of IBC extends to execution of
Section 14 of the Indian Insolvency and Bankruptcy Code, 2016 (‘IBC’) imposes a
moratorium on the initiation and continuation of legal proceedings against a corporate debtor
during the Corporate Insolvency Resolution Process (‘CIRP’). It states that the adjudicating
authority shall declare a moratorium for prohibiting ‘the institution of suits or continuation of
pending suits or proceedings against the corporate debtor including execution of any
judgment, decree or order in any court of law, tribunal, arbitration panel or other authority’13.
3.1 International Arbitral Award

3.1.1 The tensions of the strained relationship between parallel insolvency and arbitration
proceedings have been the subject of much scholarship.14
1.1.1 The Arbitration and Conciliation Act 1996 (the Act). Part II of the Act deals with the manner
of enforceability of certain foreign arbitration awards, namely awards made under the New
York and Geneva Conventions. Under the Act, as under its predecessor, foreign arbitration
awards are enforceable in Indian courts subject to certain conditions, which are set out under
Sections 48 and Section 57 of the Act.
1.1.2 That is the distinction between the filing of a petition seeking initiation of CIRP and its
admission has been addressed by the Indian courts on several occasions. 15 Under Indian law,
the mere filing of an application seeking initiation of CIRP against the CD, while it is pending
admission, does not constitute a bar on an Arbitral Tribunal from proceeding with ongoing
arbitration proceedings.
1.1.3 The Supreme Court of India elaborated upon this, holding that the purpose of the moratorium
was to provide debtors a “breathing spell” during which they can seek to reorganise the
business.16 The question that arises is whether the “calm period” should provide complete
immunity to the CDs?
13
Section 14 of Insolvency and bankruptcy code 2016
14
Deyan Draguiev, “The Effect of Insolvency on Pending International Arbitration: What is and What Should Not Be”,
(2015) 32 Journal of International Arbitration, Issue 5, pp. 511-542....
15
Indus Biotech (P) Ltd. v. Kotak India Venture (Offshore) Fund, (2021) 6 SCC 436, para 26; Jasani Realty (P) Ltd. v.
Vijay Corpn., 2022 SCC OnLine Bom 879, paras 17 and 21....
16
Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407, para 14...
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1.1.4 The High Court of Delhi in Power Grid Corpn. of India Ltd. v. Jyoti Structures Ltd17. (Power
Grid Corporation), however, clarified that the term ”proceedings” as mentioned in Section
14(1)(a) is not preceded by the word ”all”, indicating that the moratorium proceedings would
not apply to all the proceedings against the CD. In particular, Section 14 would not apply to
proceedings which are for the benefit of the CD.
1.1.5 Arbitral proceedings have been initiated after the declaration of moratorium, the continuation
of the arbitration proceedings depends on whether the claims are (a) for value maximisation
of the assets of the CD; or (b) in the nature of a debt recovery action against the CD.
1.1.6 Canara Bank v. Deccan Chronicle Holdings Ltd.32, Nclat stated that 18, “the Supreme Court
has power under Article 32 of the Constitution of India and High Court under Article 226 of
the Constitution of India which power cannot be curtailed by any provision of an Act or a
court. In view of the aforesaid provision of law, we make it clear that “moratorium” will not
affect any suit or case pending before the Supreme Court under Article 32 of the Constitution
of India or where an order is passed under Article 136 of the Constitution of India.
“Moratorium” will also not affect the power of the High Court under Article 226 of the
constitution of India.
1.1.7 There was an agreement between ODFSL and NFL with the dispute resolution clause which
stated that all disputes arising out of and/or relating to this agreement shall primarily
endeavour to amicably resolve the same through mediation, and if the mediation fails, then
the parties shall refer the dispute to an arbitral tribunal duly constituted as per the arbitration
rules of Merchants and Traders of Asgard Association which shall be presided over by a sole
arbitrator appointed by ODFSL. The Arbitration proceedings shall be governed by the
Arbitration and Conciliation Act, 1996 of Xandar19.
1.1.8 The respondent (ODFSL) had invoked the dispute resolution clause and proceedings of
arbitration were pending before the tribunal. The arbitral tribunal concluded the proceedings
and passed an arbitral award on 30.11.2022 in favour of the claimant directing NFL to
compensate ODFSL for the loss and injury.
17
2017 SCC OnLine Del 12189, paras 5 and 10....
18
2017 SCC OnLine NCLAT 255....
19
Please see the agreement between ODFSL and NFL.
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1.1.9 Respondent humbly submitted that the petitioner intentionally invoked the CIRP to gain
undue benefit of moratorium.
3.2 Security Board as Respondent

3.2.1 The consortium of financial institutions found certain irregularities regarding the filing of
returns and unfair trade practices while scrutinising the loan applications of NFL, and thus,
reported the same to the Securities and Exchange Board of Xandar (hereinafter “Securities
Board”). Accordingly, the securities board took cognizance of the complaint and initiated an
inquiry into the affairs of NFL20.
3.2.2 It is the duty of the respondent (Security Board) to protect the interests of investors in
securities and to promote the development of, and to regulate the securities market, by such
measures as it thinks fit.21
3.2.3 Notwithstanding anything contained in any other law for the time being in force while
exercising the powers under 28A [clause (i) or clause (ia) of sub-section (2) or sub- section
(2A)], the Board shall have the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters,
namely :—
(i) The discovery and production of books of account and other documents, at such
place and such time as may be specified by the Board;
(ii) summoning and enforcing the attendance of persons and examining them on
oath;
(iii) Inspection of any books, registers and other documents of any person referred to
in section 12, at any place;]
(iv) Inspection of any book, or register, or other document or record of the company
referred to in sub-section (2A);
(v) Issuing commissions for the examination of witnesses or documents.
3.2.4 The Security Board has power to initiate inquiry and proceedings when there are information
of irregularities or indulging in unfair trade practices. And also Security Board has power to
attach any movable and immovable property.22
20
Please see the Facts, para no. 6
21
Section 11(1),SEBI act
22
Section 28A(1) of SEBI act
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3.2.5 The Security Board Attached the property of the petitioner because the respondent finds the
irregularities and unfair trade practice in NFL and also to protect the investors this step has
been taken.
3.2.6 The NCLT in Mumbai held in Roofit Industries Ltd. v. BSE Limited that the non-obstante
clause, which is provided under section 238 can only be used when the provisions of another
law that addresses the IBC’s primary concerns are in conflict with those of the IBC.
3.2.7 The respondent humbly submitted that the attachment of property is done with bona fide
intention and to save the interest of the investors so the respondent request the hon’ble court
to set aside the petitioner request.
3.3 Competition Commission as Respondent

3.3.1 Section 3 of the act deals with the Anti-competitive agreements and Section 4 of the act deals
with the Dominant abuse of power.23
3.3.2 Section 6 of Competition commission act deals with Regulation of combinations.
(1) No person or enterprise shall enter into a combination which causes or is likely to cause
an appreciable adverse effect on competition within the relevant market in India and
such a combination shall be void.
3.3.3 NFL had acquired the Connaught Foods in 2022, faced financial distress its creditors were
planning to initiate insolvency. Upon sensing an opportunity, NFL acquired Connaught
Foods, as a result of which the NFL’s business expanded by 15%.
3.3.4 Respondent received the Complaint that NFL has indulged in anti-competitive practices by
abusing its dominant position in the market. Complainant also stated that the said acquisition
is likely to cause an appreciable adverse effect on competition. Therefore respondent initiate
the inquiry under section 20.24
3.3.5 The Respondent observed that NFL had indulged in anti-competitive practice, and therefore
directed NFL to pay a penalty of Rs. 1 Crore (Rupees One Crore only).25
3.3.6 The Respondent followed procedure of section 19 of the act which deals with the Inquiry into
certain agreements and dominant position of enterprise.26
3.3.7 The respondent humbly submitted that NFL had indulged in anti-competitive activities which
will harm the consumers and the respondent is bound to take the action as per the laws. The
hon’ble court should consider that although there is insolvency proceedings pending and after
23
CCI act,2000
24
Competition commission act,2000
25
Section 27(b), CCI Act, impose such penalty….
26
Section 26,CCI act, Procedure for inquiry under section 19…
15 | P a g e
the adjudicating authority refused to accept the plan and order for liquidation the impact of
moratorium shall not be in force.
ISSUE 4. Whether NFL had fraudulently initiated CIRP and has submitted the Resolution Plan
at the behest of a related party in order to seek undue benefit of moratorium in various
proceedings and inquiries pending before other forums.
The Petitioner initiated the Corporate Insolvency Resolution Process under Section 10 of the
Insolvency and Bankruptcy Code, 2016 because it has been said that rising there is financial crunch
and protect the integrity of the company and also investigation of the Securities and Exchange
Board of Xandar, therefore the application was admitted by the Adjudicating Authority and
accordingly, vide order dated 12.11.2022 issued moratorium under Section 14 of the Insolvency and
Bankruptcy Code, 2016.
These reasons are just made to initiate the CIRP at the behest of a related party, who also submit the
resolution plan. It is fact that related party had once held the key managerial position. 27
4.1 Conflict of Interest and Related Party Influence

4.1.1 Section 5 (24) provides for the definition of related party of the corporate debtor. 28 The
expression “related party” describes a commutative relationship.
4.1.2 Related party are not eligible for proposing resolution plan to the corporate debtor. The person
who had once held managerial position in company falls under the term “related party”29
4.1.3 The resolution applicant is once hold the managerial post along with the promoters he must
have interests in company’s affair and transactions. To prove that he has no interest he must
have openly shown his identity prior to the insolvency process. But the applicant did not
inform that fact himself to the CoC so there may be some conflict of interest and a related.
party cannot suddenly become a non-related party by assigning its debt to another party with
no concrete reason for acceptance of this debt by the other party.30
4.1.4 Related party had influenced the NFL to initiate the CIRP. NFL has raised an amount of Rs.
10 Crore in the year 2019 and again in 2022 when loan applications were pending. NFL also
Acquire its competition Connaught Foods in 2022.
27
Para 17, moot proposition
28
IBC,2016
29
Section 5(24)h of IBC
30
16 | P a g e
4.2 Undue benefit of the moratorium

4.2.1 NFL initiated the CIRP to take undue benefit of the moratorium to prevent the inquiry and
proceedings of Security Board and Competition Commission and also the Arbitral award.
4.2.2 The respondent also submitted that the NFL has malicious intention from the start. It can be
seen that intentionally the acquisition was made and then default on the payments of ODFSL
and then CIRP proceeding initiation to seek undue benefit of moratorium.
4.3 Fraudulent Intent of the Petitioner to seek undue benefit of Moratorium

4.3.1 In the arbitration process the petitioner filled the counter-claim sought the refund of the
advance amount paid pursuant to agreements dated 02.09.2022 and 15.09.2022.
4.3.2 Operational creditors were not taken into consideration because one of the major operational
creditor was the financial creditor, e.g. ODFSL.
17 | P a g e
PRAYERS
In light of the issues raised, arguments advanced and authorities cited, the counsel for the
Respondent humbly prays that the Hon’ble Court be pleased to adjudge, hold and declare:
FIND THAT:
1. The present appeal is not maintainable.
2. The Adjudicating Authority was in the remit to reject the resolution plan approved by
requisite majority i.e. 66%.
3. The resolution applicant is ineligible to submit resolution plan under section 29A of IBC.
4. The canvass of moratorium is not very well valid under Section 14 of IBC.
5. The CIRP initiated by NFL under Section 10 of IBC is fraudulent.
AND/OR
Pass any other order as it may deem it, in the interest of justice, equity and good conscience.
All of which is most humbly and respectfully submitted.
18 | P a g e

Memorial For Respondent R12 Last

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TEAM CODE : R12

NATIONAL INSOLVENCY & BANKRUPTCY LAW MOOT COURT

SLP Civil) No. 246 Of 2022

W.P. (Civil) No. 135 Of 2022

Civil Appeal No. 567 Of 2023

ON SUBMISSION TO THE REGISTRY OF THE COURT OF THE HON’BLE

Insolvency and Bankruptcy code, 2016 1

BALADY SHEKER SHETTY V. AVVAS INFO TECH PVT LTD 8

3. Whether the canvass of moratorium under Section 14 of IBC extends to execution of

1.1. Resolution plan by resolution applicant

1.2. Examination by resolution professional

Approval or Rejection of resolution plan by Adjudicating Authority

the Resolution Plan?

3.1 International Arbitral Award

3.2 Security Board as Respondent

3.3 Competition Commission as Respondent

4.1 Conflict of Interest and Related Party Influence

4.2 Undue benefit of the moratorium

4.3 Fraudulent Intent of the Petitioner to seek undue benefit of Moratorium

All of which is most humbly and respectfully submitted.

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