# In the matter of Sreedhar Tripathy  Vs. Gujarat State Financial Corporation & Ors. Company Appeal (AT) (Insolvency) No. 1062 of 2022

> NCLAT judgment dated 2022-10-12. Citation: TCN-2022-NCLAT-00164. The appeal was filed against an order dated 23.06.2022 by the Adjudicating Authority, which…

- **Court:** NCLAT
- **Order date:** 12 Oct 2022
- **Citation:** TCN-2022-NCLAT-00164
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sreedhar-tripathy-vs-gujarat-state-financial-corporation-ors-company-appeal-926e68f4

## Summary

### Background

The appeal was filed against an order dated 23.06.2022 by the Adjudicating Authority, which directed the liquidation of the Corporate Debtor. The appellant challenged the order, arguing that the decision of the Committee of Creditors (CoC) to liquidate the Corporate Debtor was arbitrary. The CoC allegedly did not want to continue with the Corporate Insolvency Resolution Process (CIRP). Assets were not handed over to the Resolution Professional after the admission of the Section 10 application, preventing the Resolution Professional from drawing up an Information Memorandum and issuing an Expression of Interest (EOI). The CoC decided to withdraw under Section 12A, citing that the Corporate Debtor had been non-functional since 2002, its machinery was scrap, and the

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## Facts

Sreedhar Tripathy filed an appeal against an order by the Adjudicating Authority dated 23.06.2022, which directed the liquidation of the Corporate Debtor. The appellant argued that the decision of the CoC to liquidate the Corporate Debtor was arbitrary. The Corporate Debtor had been non-functional since 2002, and its machinery had become scrap. The CoC decided to withdraw under Section 12A and later resolved to liquidate the Corporate Debtor. The Adjudicating Authority approved the CoC's decision for liquidation. The appellant challenged this decision, but the appellate tribunal dismissed the appeal, stating that the CoC's decision was within its powers under the I&B Code, given the specific circumstances of the case.

## Issues and analysis

### Issue 1: Whether the decision of the CoC to liquidate the Corporate Debtor was arbitrary and in violation of …

**Ratio:** The CoC is empowered to take a decision for liquidation under the statutory scheme, as

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**Reasoning:** The court reasoned that the CoC's decision was based on the fact that the Corporate

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**Interpretation:** Section 33(2) and its explanation grant the CoC broad powers to decide on

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**Application:** The court applied the ratio to the facts, noting that the CoC's decision was

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +1 more
- **Appellants:** Sreedhar Tr…
- **Respondents:** Gujarat State…
- **Advocates:** Rajesh…

## Timeline

- **2022-06-23 — Order by Adjudicating…**: The Adjudicating Authority directed the…
- **2021-04-05 — CoC Meet…**: Minutes of CoC meeting…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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