# In the matter of Annamalaiar Textiles Pvt. Ltd. MA-622-2018 in CP-224-IB-2018

> NCLT judgment dated 2018-12-06. Citation: TCN-2018-NCLT-00167. The Resolution Professional filed an application seeking the closure of the Corporate…

- **Court:** NCLT
- **Order date:** 6 Dec 2018
- **Citation:** TCN-2018-NCLT-00167
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/annamalaiar-textiles-pvt-ltd-ma-622-2018-in-cp-224-ib-2018-92cdd70f

## Summary

### Background

The Resolution Professional filed an application seeking the closure of the Corporate Insolvency Resolution Process (CIRP). The Suspended Director, Mr. O.A.A. Ananthapadmanabhan Chettiar, was present. There were two Financial Creditors: Sri Mahalakshmi Textiles and DD 650 M/s. Annamalaiar Mills and Bhuvaneshwari Textile Employees Co-operative Thrift and Credit Society.

## Facts

The Resolution Professional filed an application for the closure of CIRP. The suspended director, O.A.A. Ananthapadmanabhan Chettiar, was present. The corporate debtor had two financial creditors: Sri Mahalakshmi Textiles and DD 650 M/s. Annamalaiar Mills and Bhuvaneshwari Textile Employees Co-operative Thrift and Credit Society. The suspended director paid Rs. 2 Crores 55 lakhs to Sri Mahalakshmi Textiles through Indian Bank DD Nos.882967 to 882969 towards full and final settlement of its dues. The suspended director also paid Rs. 39,23,740/- to DD 650 M/s. Annamalaiar Mills and Bhuvaneshwari Textile Employees Co-operative Thrift and Credit Society by way of DD bearing No.882970 drawn on the Indian Bank towards full and final settlement of the outstanding debt. The

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## Issues and analysis

### Issue 1: Whether the application for closure of the Corporate Insolvency Resolution Process (CIRP) should be …

**Ratio:** The principle is that if all outstanding dues are cleared, the purpose of CIRP is

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**Reasoning:** The court reasoned that since 100% of the outstanding dues had been cleared by the

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**Interpretation:** This interprets the Insolvency and Bankruptcy Code (IBC) to allow for the

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**Application:** The Suspended Director paid all outstanding dues to the Financial Creditors.

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## Parties

- **Judges:** CH. MOHD SHARIEF…
- **Appellants:** N.Sivachal…
- **Respondents:** M.ROSHAN…; Annamalaiar…

## Timeline

- **2018-08-07 — Previous…**: An order was passed by the…
- **2018-11-16 — Committee of Creditors…**: The Committee of Creditors held a meeting and supported the application for closure of…

## 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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