# 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-00160. 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-00160
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sreedhar-tripathy-vs-gujarat-state-financial-corporation-orscompany-appeal-a78d049c

## 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, contending that the CoC's decision was arbitrarily taken. The CoC allegedly did not want to continue with the CIRP, and assets were not handed over to the Resolution Professional after the admission of the Section 10 application. Consequently, the Resolution Professional could not draw up an Information Memorandum or issue an EOI.

## Facts

Sreedhar Tripathy filed an appeal against an order by the Adjudicating Authority directing the liquidation of a Corporate Debtor. The appellant argued that the Committee of Creditors (CoC) made an arbitrary decision to liquidate the Corporate Debtor. The Corporate Debtor had been non-functional and shut down since 2002, with its machinery becoming scrap and the building in a dilapidated condition. The CoC believed that continuing the Corporate Insolvency Resolution Process (CIRP) would only incur more expenses without any corresponding advantage. The CoC had initially considered withdrawal under Section 12A but ultimately decided to liquidate the Corporate Debtor. The Adjudicating Authority approved the CoC's decision for liquidation. The appellant challenged this

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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 CoC is empowered to take decisions under the statutory scheme, and in the present

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**Reasoning:** The court was not convinced by the appellant's counsel's submission that the CoC's

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**Interpretation:** The explanation to Section 33(2) inserted by Act 26 of 2019 empowers the CoC to

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**Application:** The CoC's decision was based on the fact that the Corporate Debtor had been

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## Parties

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

## Timeline

- **2021-04-05 — CoC Meet…**: Minutes of CoC meeting dated 05.04.2021 as Annexure A-12 were brought on record by the…
- **2022-06-23 — Adjudicating Authority…**: Order by the Adjudicating Authority…

## 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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