# In the matter of Rajesh Narang Vs. Durha Vitrak Pvt Ltd & Ors.,Company Appeal (AT)(Ins.) No.612/2021

> NCLAT judgment dated 2022-12-09. Citation: TCN-2022-NCLAT-00043. The appeal was filed by an ex-Director of Durha Vitrak Pvt Ltd, which operated Febris…

- **Court:** NCLAT
- **Order date:** 9 Dec 2022
- **Citation:** TCN-2022-NCLAT-00043
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajesh-narang-vs-durha-vitrak-pvt-ltd-orscompany-appeal-af325bf1

## Summary

### Background

The appeal was filed by an ex-Director of Durha Vitrak Pvt Ltd, which operated Febris Multispeciality Hospital. The NCLT had initiated liquidation based on a CoC resolution. The appellant contested this, arguing the RP didn't adequately explore revival options and acted in concert with the primary financial creditor, LIC Housing Finance Ltd. The appellant also highlighted the hospital's operational status and revenue generation before the CIRP, and the availability of resolution plans that were rejected. The appellant contended that the RP failed to take steps to recover dues from government departments and agencies, and that the CoC meetings were improperly conducted.

## Facts

Durha Vitrak Pvt Ltd, operating Febris Multispeciality Hospital, faced financial difficulties leading to CIRP initiation on 2019-11-08. LIC Housing Finance Ltd held 93% voting share in the CoC. The hospital was operational with 150 beds and generating revenue before CIRP. The RP, Aishwarya Mohan Gahrana, was appointed. The appellant, an ex-director, alleged the RP favored liquidation over revival, rejecting a Rs. 32.5 crore offer. The hospital's staff decreased significantly post-IRP. The RP held CoC meetings at LIC Housing Finance Ltd's premises. The account of CD was declared NPA on 2018-04-07. The RP sent a mail on 2020-05-11 seeking cooperation of both the ex-directors for preparation of Balance Sheet. The RP received two proposed resolution plans, but the CoC

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## Issues and analysis

### Issue 1: Whether the NCLT's order for liquidation under Section 33(2) of the IBC was appropriate given the …

**Ratio:** The commercial wisdom of the CoC is given paramount status, but it should not be

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**Reasoning:** The court found that the NCLT mechanically allowed the petition for liquidation without

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**Interpretation:** Section 33(2) of the IBC allows for liquidation when the CoC approves it, but

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**Application:** The court applied this principle by setting aside the NCLT's order for

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## Parties

- **Judges:** Rakesh…; Ashok Kumar…
- **Appellants:** Rajesh N…
- **Respondents:** Febris Multispecia…; Durha Vitrak Pvt.…

## Timeline

- **2019-02-01 — Petition under Section…**: A petition under Section 7 of the IBC Code…
- **2019-11-08 — CIRP Init…**: CIRP was initiated…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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