# In the matter of Ajay Agarwal & Anr. Vs. Ashok Magnetic Pvt. Ltd. & Ors. CA (AT) (Insolvency) No. 792 & 793-2018

> NCLAT judgment dated 2019-02-22. Citation: TCN-2019-NCLAT-00764. The case involves two appeals (Company Appeal (AT) (Insolvency) No. 792 of 2018 and Company…

- **Court:** NCLAT
- **Order date:** 22 Feb 2019
- **Citation:** TCN-2019-NCLAT-00764
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ajay-agarwal-anr-vs-ashok-magnetic-pvt-ltd-ors-ca-9da6cf68

## Summary

### Background

The case involves two appeals (Company Appeal (AT) (Insolvency) No. 792 of 2018 and Company Appeal (AT) (Insolvency) No. 793 of 2018) filed by Ajay Agarwal & Anr. against orders passed by the Adjudicating Authority (National Company Law Tribunal), Chennai. The Adjudicating Authority had rejected a resolution plan submitted by the appellants and ordered the liquidation of Ashok Magnetics Limited (Corporate Debtor). The appellants argued that Ashok Magnetics Limited, being a Small Scale Industry, should not have its promoters deemed ineligible under Section 29A for filing a resolution plan, referencing Section 240A of the I&B Code. The Committee of Creditors (CoC) had rejected the resolution plan, finding it not feasible.

## Facts

Ajay Agarwal & Anr. filed appeals against orders of the Adjudicating Authority (NCLT, Chennai) in MA No. 478/2018 and MA No. 163/2018. The Adjudicating Authority rejected the resolution plan submitted by Ajay Agarwal & Anr., who were members of the Board of Directors, and ordered the liquidation of Ashok Magnetics Limited (Corporate Debtor). The appellants argued that Ashok Magnetics Limited, being a Small Scale Industry, should not have its promoters deemed ineligible under Section 29A for filing a resolution plan, referencing Section 240A of the I&B Code. The Committee of Creditors (CoC) rejected the resolution plan, finding it not feasible. The CoC considered two resolution plans, including one submitted by the Appellants, but voted against them. The

…

## Issues and analysis

### Issue 1: Whether the Board of Directors of ‘M/s. Ashok Magnetics Limited'- ('Corporate Debtor') or any of …

**Ratio:** The Appellate Tribunal did not decide on the applicability of Section 29A, as the

…

**Reasoning:** The Appellate Tribunal found that the 'Committee of Creditors' have voted against the

…

**Interpretation:** The interpretation of Section 29A and its applicability to the Board of

…

**Application:** Since the resolution plan was rejected by the CoC, the question of whether the

…

## Parties

- **Judges:** S.J. Mukhop…
- **Appellants:** Ajay Agarwal &…
- **Respondents:** Ashok Magnetics…; Ashok Magnetic…

## Timeline

- **2018-11-09 — Orders by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, passed…
- **2019-02-22 — Appeals Pre…**: The Appellants preferred appeals against the orders dated 9th November, 2018 passed by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 29 — Preparation of information memorandum](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-29)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/ajay-agarwal-anr-vs-ashok-magnetic-pvt-ltd-ors-ca-9da6cf68