# In the matter of Affinity Beauty Salon Pvt. Ltd. CA No. 2685-2019 & CA No. 1401 & 2969 -2020 in Company Petition No. 786(PB) of 2018

> NCLT judgment dated 2020-08-28. Citation: TCN-2020-NCLT-00763. The case involves a company petition filed by Anurag Chandra against Affinity Beauty Salon Pvt.…

- **Court:** NCLT
- **Order date:** 28 Aug 2020
- **Citation:** TCN-2020-NCLT-00763
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/affinity-beauty-salon-pvt-ltd-ca-no-2685-2019-ca-no-1401-2969-2020-in-company-pe-18cbb573

## Summary

### Background

The case involves a company petition filed by Anurag Chandra against Affinity Beauty Salon Pvt. Ltd., the corporate debtor. Several applications were filed, including CA-1401/2020 by the Resolution Professional seeking withdrawal of CA-2685/2019, which was for approval of a resolution plan approved by the Committee of Creditors (CoC). The ex-directors, who filed the plan, failed to furnish a performance Bank Guarantee (PBG) of ₹3.6 Crore, despite an extension. The Resolution Applicant also failed to furnish the PBG by the extended deadline. The CoC then passed a resolution for liquidation and closure of outlets. The Resolution Applicants claimed they furnished the PBG later and that the Corporate Debtor should not be sent into liquidation, highlighting a provision of

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## Facts

Anurag Chandra filed a company petition against Affinity Beauty Salon Pvt. Ltd. CA-1401/2020 was filed by the Resolution Professional seeking withdrawal of CA-2685/2019, which was for approval of a resolution plan. The ex-directors, who filed the plan, failed to furnish a performance Bank Guarantee (PBG) of ₹3.6 Crore, despite an extension. The time given for furnishing PBG was 21.11.2019, with an extended time up to 30.01.2020. The Resolution Applicant failed to furnish the PBG by 30.01.2020. The CoC passed a resolution for liquidation on 12.02.2020. The Resolution Applicants claimed they furnished the PBG on 20.03.2020. The liquidation value of the company was shown as below ₹10Crore, while the Resolution Applicants made a provision of ₹36Crore in their plan. The

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## Issues and analysis

### Issue 1: Whether the Resolution Plan should be approved despite the failure of the Resolution Applicant to …

**Ratio:** The furnishing of a performance Bank Guarantee (PBG) is a mandatory condition for the

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**Reasoning:** The court reasoned that since the Resolution Applicant failed to furnish the PBG despite

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**Interpretation:** The interpretation of the IBC is that the furnishing of a PBG is a prerequisite

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**Application:** In this case, the Resolution Applicant failed to furnish the PBG despite the

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## Parties

- **Judges:** SHRI. B.S.V…; SHRI. HEMANT…
- **Appellants:** Anurag Ch…
- **Respondents:** Affinity Beauty…; Rohit Sehgal and…

## Timeline

- **2018-01-01 — Company Petiti…**: Company Petition No.…
- **2019-11-21 — Time Given for…**: Initial time given for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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