# In the matter of Hero Fincorp Limited vs. Hema Automotive Private Limited Company Appeal (AT) (Insolvency) No.1540 of 2022

> NCLAT judgment dated 2023-02-06. Citation: TCN-2023-NCLAT-00736. The appeal challenges the order dated 23.11.2022 passed by the National Company Law Tribunal,…

- **Court:** NCLAT
- **Order date:** 6 Feb 2023
- **Citation:** TCN-2023-NCLAT-00736
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/hero-fincorp-limited-vs-hema-automotive-private-limited-company-appeal-ff81de54

## Summary

### Background

The appeal challenges the order dated 23.11.2022 passed by the National Company Law Tribunal, New Delhi Court-VI, which dismissed IA No.5586 of 2022. This application was filed under Section 33, sub-section (2) read with Section 34 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the liquidation of the Corporate Debtor. The Adjudicating Authority directed the CoC to reconsider the application for liquidation, leading the Appellant, the sole financial creditor, to file this appeal.

## Facts

Hero Fincorp Limited, the Appellant, extended financial facilities to the Corporate Debtor in 2018-2019. The Corporate Debtor defaulted on loan repayments. The Financial Creditor initiated proceedings under the SARFAESI Act, taking possession of secured assets. On 08.07.2022, an order commenced the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Appellant filed a claim in Form-C on 09.09.2022, which was provisionally accepted. The Committee of Creditors (CoC) was formed with the Appellant as the sole member. On 07.10.2022, the Resolution Professional (RP) published Form-G, setting 24.10.2022 as the last date for Expression of Interest (EOI). The CoC convened on 19.10.2022 to discuss eligibility criteria and EOI extension. On 19.10.2022,

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in directing the Committee of Creditors (CoC) to …

**Ratio:** The explanation to Section 33(2) of the IBC empowers the CoC to take a decision to

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**Reasoning:** The Adjudicating Authority found that the CoC, with only one member, had resolved for

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**Interpretation:** Section 33(2) grants the CoC significant power to decide on liquidation.

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**Application:** In this case, the Adjudicating Authority's decision to direct the CoC to

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## Parties

- **Judges:** Ashok Bh…; Shreesha…
- **Appellants:** Hero FinCorp…
- **Respondents:** M/s. Hema…
- **Advocates:** Sanjeev…; Taniya B…; +2 more

## Timeline

- **2018-01-01 — Financial Facilities…**: Appellant extended financial…
- **2022-07-08 — CIRP Commen…**: Order passed commencing Corporate Insolvency Resolution Process (CIRP) against the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33 — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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