# In the matter of Abhayam Trading Limited CP-491-(IB)-CB-2017

> NCLT judgment dated 2017-11-17. Citation: TCN-2017-NCLT-00182. The case pertains to an application filed under Section 33(2) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 17 Nov 2017
- **Citation:** TCN-2017-NCLT-00182
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/abhayam-trading-limited-cp-491-ib-cb-2017-068ce807

## Summary

### Background

The case pertains to an application filed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking the liquidation of M/s. Abhayam Trading Limited (Corporate Debtor). The Committee of Creditors (CoC) unanimously passed a resolution in its 3rd meeting on 25.09.2017 to liquidate the Corporate Debtor. An earlier application under Section 7 of the I&B Code, filed by M/s. Chivas Trading Pvt. Ltd. (Financial Creditor) against M/s. Abhayam Trading Limited, was admitted on 31.05.2017, initiating the Corporate Insolvency Resolution Process (CIRP). The IRP made a public announcement, and three Financial Creditors filed their claims, leading to the constitution of the CoC. The CoC approved the appointment of Rakesh Tulsidas Chaturvedi as RP.

## Facts

M/s. Chivas Trading Pvt. Ltd. (Financial Creditor) initiated Corporate Insolvency Resolution Process (CIRP) against M/s. Abhayam Trading Limited (Corporate Debtor) under Section 7 of the I&B Code, which was admitted on 31.05.2017. The IRP made a public announcement, and three Financial Creditors filed their claims, leading to the constitution of the CoC. The CoC, in its 3rd meeting dated 25.09.2017, unanimously resolved to liquidate the Corporate Debtor due to a lack of business prospects and the absence of a feasible resolution plan. The Corporate Debtor also acknowledged the infeasibility of a resolution plan. The CoC determined that providing additional time to the Corporate Debtor would only increase their losses. The CoC requested the Company to present a

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## Issues and analysis

### Issue 1: Whether the application for liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, …

**Ratio:** Section 33(2) of the I&B Code allows for the liquidation of the Corporate Debtor if

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**Reasoning:** The CoC unanimously resolved to liquidate the Corporate Debtor due to the lack of

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**Interpretation:** Section 33(2) provides the legal basis for initiating liquidation proceedings

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**Application:** Given the CoC's resolution and the absence of a viable resolution plan, the

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## Parties

- **Judges:** CH. MOHD SHARIEF…; S. VIJAYARA…
- **Respondents:** M/s. Abhayam…
- **Advocates:** Preeti…; Akshaya Ram…

## Timeline

- **2017-05-31 — Admission of CIRP…**: Application under Section 7 of the I&B Code filed by M/s. Chivas Trading Pvt. Ltd.…
- **2017-06-30 — First CoC M…**: The first meeting of the CoC was held, and the appointment of IRP Rakesh Tulsidas…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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