# In the matter of Sunil Sureshkumar Kakkad vs. Union of India

> HC judgment dated 2023-10-26. Citation: TCN-2023-HC-00026. The case involves a challenge to the constitutional validity of Section 8 of the Insolvency and…

- **Court:** HC
- **Order date:** 26 Oct 2023
- **Citation:** TCN-2023-HC-00026
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/sunil-sureshkumar-kakkad-vs-union-of-india-e47d46e9

## Summary

### Background

The case involves a challenge to the constitutional validity of Section 8 of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, which inserted an Explanation to sub-section (2) of Section 33 of the Insolvency and Bankruptcy Code (IBC), 2016. The petitioner, a shareholder and suspended director of Sujyot Infrastructure Pvt. Ltd. (the Corporate Debtor), contested the decision of the Committee of Creditors (COC) to liquidate the Corporate Debtor without exploring revival possibilities. The Insolvency Application being CP (IB) No.559 of 2019, filed against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016, the Corporate Insolvency Resolution Process (‘CIRP') has been initiated by the Adjudicating Authority (NCLT, Ahmedabad). The

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## Facts

The petitioner, a shareholder and suspended director of M/s. Sujyot Infrastructure Pvt. Ltd., challenged the decision of the Committee of Creditors (COC) to liquidate the Corporate Debtor. The Insolvency Application being CP (IB) No.559 of 2019, filed against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016, the Corporate Insolvency Resolution Process (‘CIRP') has been initiated by the Adjudicating Authority (NCLT, Ahmedabad). The Committee of Creditors (COC) was constituted on 22.12.2021 comprising of State Bank of India and Bank of Baroda. The first meeting of COC was convened on 1.2.2022. The COC decided to liquidate the Corporate Debtor despite a request made by the petitioner to explore the possibilities of its revival. The

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## Issues and analysis

### Issue 1: Whether Section 33(2) of the I&B Code confers unfettered powers on the COC to liquidate the …

**Ratio:** The court relied on the principle that the commercial wisdom of the Committee of

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**Reasoning:** The court reasoned that the discretion given to the COC is qualified by the word 'may' in

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**Interpretation:** The court interpreted the relevant provisions of the IBC and the Amendment Act

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**Application:** The court applied the principles of commercial wisdom and legislative intent to

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## Parties

- **Judges:** Sunita Ag…; ANIRUDDHA P…
- **Appellants:** Sunil Sureshkumar…
- **Respondents:** Sujyot Infrastruct…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2019-01-01 — Insolvency App…**: Insolvency Application being CP (IB) No.559 of 2019, filed against the Corporate Debtor…
- **2021-12-22 — Order Da…**: Order against the Corporate Debtor and an Interim Resolution Professional (‘IRP') has…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(1) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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