# In the matter of Siva Rama Krishna Prasad Vs. S Rajendran, Official Liquidator of
M/S Krishna Industrial Corporation Ltd. & Ors. CA(AT)(Ins)No. 751 with 752 of 2020

> NCLAT judgment dated 2020-09-04. Citation: TCN-2020-NCLAT-00136. The appeals arise from the Corporate Insolvency Resolution Process (CIRP) initiated by the…

- **Court:** NCLAT
- **Order date:** 4 Sept 2020
- **Citation:** TCN-2020-NCLAT-00136
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/siva-rama-krishna-prasad-vs-s-rajendran-official-liquidator-of-ms-krishna-indust-fb5403ab

## Summary

### Background

The appeals arise from the Corporate Insolvency Resolution Process (CIRP) initiated by the Financial Creditor, Maximus Asset Reconstruction Company Limited, against the Corporate Debtor, M/s Krishna Industrial Corporation Limited. The Adjudicating Authority (National Company Law Tribunal, Chennai) sought liquidation of the Corporate Debtor under Section 33(2) of the I&B Code due to the absence of a resolution plan and the promoter group's failure to provide concrete information about a prospective investor. An application was filed under Section 60(5)(c) of the I&B Code seeking to keep the liquidation application in abeyance, but it was dismissed.

## Facts

Maximus Asset Reconstruction Company Limited initiated Corporate Insolvency Resolution Process (CIRP) against M/s Krishna Industrial Corporation Limited. The Resolution Professional, S. Rajendran, filed MA/376/2020 before the Adjudicating Authority (NCLT, Chennai) seeking liquidation under Section 33(2) of the I&B Code because no resolution plan was received. The promoter group failed to provide concrete information about a prospective investor. Siva Rama Krishna Prasad, the erstwhile Promoter/Director, filed an application under Section 60(5)(c) to keep the liquidation application in abeyance, claiming a low debt-asset ratio and willingness to settle creditor claims. The Adjudicating Authority dismissed this application, noting the lack of a concrete settlement

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in ordering the liquidation of the Corporate …

**Ratio:** The Committee of Creditors has the commercial wisdom to decide on the viability and

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**Reasoning:** The court reasoned that the Committee of Creditors is best positioned to assess the

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**Interpretation:** This interprets the I&B Code to give primacy to the commercial wisdom of

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**Application:** The court applied this principle to the facts, noting that the Committee of

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## Parties

- **Judges:** Bansi Lal…; V. P. S…; +1 more
- **Appellants:** Siva Rama Krishna…
- **Respondents:** M/s Krishna…; S Rajendran,…
- **Advocates:** B.B. Sa…; Srikaanth S…; +2 more

## Timeline

- **N/A — CIRP Init…**: Maximus Asset Reconstruction Company Limited initiated CIRP against M/s Krishna…
- **2020-07-27 — Impugned…**: Impugned orders passed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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