# In the matter of Yogesh Singh
Vs.
Mr. Supriyo Kumar Chaudhuri & Ors. Company Appeal (AT)(Insolvency) No.565 of 2021

> NCLAT judgment dated 2022-08-30. Citation: TCN-2022-NCLAT-00254. The case involves two appeals, Company Appeal (AT)(Insolvency) No.565 of 2021 and Company…

- **Court:** NCLAT
- **Order date:** 30 Aug 2022
- **Citation:** TCN-2022-NCLAT-00254
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/yogesh-singh-vs-mr-supriyo-kumar-chaudhuri-ors-company-appeal-391390f4

## Summary

### Background

The case involves two appeals, Company Appeal (AT)(Insolvency) No.565 of 2021 and Company Appeal (AT)(Insolvency) No.594 of 2021, challenging an order dated 26.07.2021 passed by the National Company Law Tribunal (NCLT), Allahabad Bench, in IA No.19/2021 filed in CP No.(IB)223/ALD/2019. The NCLT order allowed the liquidator to distribute accumulated cash profits of the corporate debtor, JVL Agro Industries Ltd, to stakeholders. The appellant in No.594/2021 is the ex-Director, and the appellant in No.565/2021 is an employee of the corporate debtor. The appeals were heard together and are being disposed of by a common judgment.

## Facts

The corporate debtor, JVL Agro Industries Ltd, underwent Corporate Insolvency Resolution Process (CIRP) initiated by Standard Chartered Bank under Section 7 of IBC. The application was admitted on 25.07.2018, and Mr. Supriyo Kumar Chaudhuri was appointed as the Resolution Professional. After the failure of CIRP, liquidation was ordered on 19.08.2020. During liquidation, the Stakeholders Consultation Committee considered distributing approximately Rs.99.35 crores lying in the corporate debtor's bank account to the shareholders. The liquidator prepared a liquidation cost estimate of Rs.21.95 crores, which was less than the accumulated cash profit of Rs.96.21 crores. The liquidator filed IA No.19/2021 seeking clarification on whether the accumulated cash profit could be

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in permitting the Liquidator to distribute the amount …

**Ratio:** The distribution of accumulated profit is permissible under Section 53 of the IBC,

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**Reasoning:** The NCLAT reasoned that the distribution was of accumulated profits, not proceeds from

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**Interpretation:** Section 53 of the IBC outlines the waterfall mechanism for distributing assets

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**Application:** The NCLAT applied this reasoning to the facts, noting that the distribution was

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## Parties

- **Judges:** Rakesh…
- **Appellants:** Yogesh…
- **Respondents:** JVL Agro Industrie…; Mr Supriyo Kumar…

## Timeline

- **2018-07-25 — CIRP Init…**: Application under Section 7 of IBC filed by…
- **2018-09-10 — Appointment of…**: Mr Supriyo Kumar Chaudhuri…

## 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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