# In the matter of Dhirjlal Prabhatbhai Lakkad vs. Ramesh Kumar Totala & Ors.

> NCLAT judgment dated 2023-08-03. Citation: TCN-2023-NCLAT-00310. The appeal was filed against the order dated 29.08.2022 passed by the National Company Law…

- **Court:** NCLAT
- **Order date:** 3 Aug 2023
- **Citation:** TCN-2023-NCLAT-00310
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/dhirjlal-prabhatbhai-lakkad-vs-ramesh-kumar-totala-ors-0fe22beb

## Summary

### Background

The appeal was filed against the order dated 29.08.2022 passed by the National Company Law Tribunal, Ahmedabad Bench, Court-II in I.A. No.186/AHM/2020 and I.A. No.599/AHM/2020 in CP (IB) 322/NCLT/AHM/2018. The CIRP against the Corporate Debtor M/s Galaxy Cotton and Textiles Pvt. Ltd. commenced by order of the Adjudicating Authority dated 10.08.2019. This was initiated following an application by the State Bank of Patiala under Section 7 of the Insolvency and Bankruptcy Code, 2016. An earlier appeal challenging the admission order was withdrawn. The Resolution Professional (RP) issued Form-G on 24.12.2019, and the Appellant submitted an Expression of Interest (EOI) on 24.01.2020. The Committee of Creditors (CoC) decided to liquidate the Corporate Debtor on 30.01.2020.

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## Facts

The Corporate Debtor, M/s Galaxy Cotton and Textiles Pvt. Ltd., faced Corporate Insolvency Resolution Process (CIRP) initiated by the Adjudicating Authority on 10.08.2019, based on an application by State Bank of Patiala under Section 7 of the Insolvency and Bankruptcy Code (IBC). An earlier appeal by the Appellant challenging the admission order was withdrawn. The Resolution Professional (RP) issued Form-G on 24.12.2019. The Appellant submitted an Expression of Interest (EOI) on 24.01.2020, after the due date. The Committee of Creditors (CoC) decided to liquidate the Corporate Debtor on 30.01.2020. The Appellant filed I.A. No. 186 of 2020 challenging the amount of dues admitted by Respondent No.5, the Financial Creditor. The RP filed I.A. No. 305 of 2020 seeking

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## Issues and analysis

### Issue 1: Whether the decision of the Committee of Creditors (CoC) to liquidate the Corporate Debtor was …

**Ratio:** The power of the Committee of Creditors to take the decision for liquidation is very wide

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**Reasoning:** The Tribunal reasoned that the CoC's decision was based on several factors, including the

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**Interpretation:** Section 33 of the IBC Code grants the CoC broad powers to decide on

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**Application:** The CoC, having the requisite voting share, decided to liquidate the Corporate

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Dhirjlal Prabhatbh…
- **Respondents:** Galaxy Cotton &…; Galaxy Cotton and…; +1 more

## Timeline

- **2019-08-10 — CIRP Commen…**: CIRP against the Corporate Debtor M/s Galaxy Cotton and Textiles Pvt. Ltd. commenced by…
- **2019-12-24 — Form-G I…**: The RP issued…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 230 — Delegation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-230)

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