# In the matter of V. Ganesan Erst. Liquidator of Kamachi Industries Ltd. vs. Prudent ARC Limited

> NCLAT judgment dated 2023-12-07. Citation: TCN-2023-NCLAT-00045. The appeal challenges an order passed by the Adjudicating Authority (NCLT, Chennai) which…

- **Court:** NCLAT
- **Order date:** 7 Dec 2023
- **Citation:** TCN-2023-NCLAT-00045
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/v-ganesan-erst-liquidator-of-kamachi-industries-ltd-vs-prudent-arc-limited-71141f7f

## Summary

### Background

The appeal challenges an order passed by the Adjudicating Authority (NCLT, Chennai) which allowed an application by Prudent ARC Limited to direct the Liquidator to convene a meeting to consider the replacement of the liquidator, and subsequently replaced the liquidator. The appellant, the erstwhile liquidator, initially challenged this order before the Madras High Court and then the Supreme Court, both of which dismissed his petitions, before filing the present appeal.

## Facts

The appeal is directed against an order dated September 20, 2023, passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench – 1, Chennai). This order allowed an application filed by Prudent ARC Limited under Regulation 31A(6) of the IBBI (Liquidation Process) Regulations, 2016, read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The application sought directions for the liquidator to convene a meeting of the stakeholders consultation committee to consider the replacement of the liquidator, and also for other suitable orders. The Adjudicating Authority, in its order, noted a lack of consensus among the Secured Financial Creditors and the liquidator's vacillation in appointing an Authorized Representative, which stalled the

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## Issues and analysis

### Issue 1: Whether the appellant is entitled to the benefit of Section 14 of the Limitation Act, 1963, for the …

**Ratio:** The benefit of Section 14 of the Limitation Act, 1963, is not available to a party who,

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**Reasoning:** The NCLAT examined whether the appellant's actions in pursuing remedies before the High

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**Interpretation:** The court interpreted 'due diligence' and 'good faith' under Section 14 of the

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**Application:** The appellant, as a liquidator, was deemed to be well-versed with the statutory

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## Parties

- **Judges:** Rakesh Kuma…; Shreesha…
- **Appellants:** V. Gan…; Erst. Liquidator…
- **Respondents:** Kamachi Industries…; Prudent ARC…
- **Advocates:** B.S.V. Prakash…; A. Venkates…; +7 more

## Timeline

- **September 20, 2023 — NCLT Ord…**: Adjudicating Authority (NCLT, Chennai) passed an order allowing Prudent ARC Limited's…
- **September 25, 2023 — Writ Petitio…**: Appellant filed a writ petition (No. 28516 of 2023) before the Madras High Court…

## 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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