# In the matter of Ajudhia Distributors Ltd. CA (IB) No. 418-KB-2017 IN CP (IB) No. 181-KB-2017 (Cost Imposed)

> NCLT judgment dated 2017-11-08. Citation: TCN-2017-NCLT-00227. The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against Ajudhia…

- **Court:** NCLT
- **Order date:** 8 Nov 2017
- **Citation:** TCN-2017-NCLT-00227
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ajudhia-distributors-ltd-ca-ib-no-418-kb-2017-in-cp-ib-no-181-kb-2017-cost-impos-1fe264b4

## Summary

### Background

The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against Ajudhia Distributors Ltd. Radico Khaitan Limited filed the application. The Resolution Professional (RP) filed C.A. (IB) No. 418/KB/2017 under Section 70 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking directions and punishment for the corporate debtor's officer, director, and representative for not cooperating with the RP. Despite a show cause notice served on the director and corporate debtor, they failed to appear or respond.

## Facts

Radico Khaitan Limited initiated CIRP against Ajudhia Distributors Ltd. The Resolution Professional (RP) filed an application (C.A. (IB) No. 418/KB/2017) under Section 70 of the IBC, alleging non-cooperation from Ajudhia Distributors Ltd. despite directions from the NCLT, Kolkata Bench. A show cause notice was issued to the director and the corporate debtor on 09/10/2017 and served via email on 10/10/2017. The corporate debtor did not appear or respond. The NCLT found the corporate debtor to be deliberately disobeying its directions. This non-cooperation hindered the RP's ability to manage the affairs of the corporate debtor. The NCLT imposed a penalty of Rupees Three Lakhs on the Director, Mr. Mohit Korpal.

## Issues and analysis

### Issue 1: Whether the corporate debtor, Ajudhia Distributors Ltd., failed to cooperate with the Resolution …

**Ratio:** Section 70 of the Insolvency and Bankruptcy Code, 2016 (IBC) provides for penalties for

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**Reasoning:** The NCLT observed that the corporate debtor was not extending assistance and cooperation

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**Interpretation:** Section 70 of IBC mandates cooperation with the RP to ensure the smooth

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**Application:** The corporate debtor's failure to respond to notices and provide assistance to

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## Parties

- **Judges:** Vijai Prata…; Jinan…
- **Appellants:** Radico Khaitan…
- **Respondents:** Ajudhia Distributo…

## Timeline

- **2017-10-09 — Show Cause Noti…**: A show cause notice was issued to the…
- **2017-10-10 — Service of…**: The show cause notice was served on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 70 — Punishment for misconduct in course of corporate…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-70)

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