# Approval of Resolution Plan - Burn Standard Company Ltd.

> NCLT judgment dated 2018-03-06. Citation: TCN-2018-NCLT-01745. The case involves an application filed under section 10 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 6 Mar 2018
- **Citation:** TCN-2018-NCLT-01745
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/approval-of-resolution-plan-burn-standard-company-ltd-2eb65282

## Summary

### Background

The case involves an application filed under section 10 of the Insolvency & Bankruptcy Code, 2016, seeking an order to protect the livelihood of the petitioner, Burn Standard Company Ltd. The company had initially approached the Board of Industrial and Financial Reconstruction (BIFR) in 1994 and was declared a sick company in 1995. Following the enactment of the Insolvency & Bankruptcy Code in 2016, Burn Standard Co. Ltd. filed an application for initiating corporate insolvency resolution process. The resolution plan proposed involved closing the corporate debtor by discharging its debts to all stakeholders, including staff and workmen, based on a budgetary allocation of funds by the Ministry of Railways.

## Facts

Burn Standard Company Ltd., a public limited company under the Ministry of Railways, faced financial difficulties and was referred to BIFR in 1994, being declared a sick company in 1995. With the introduction of the Insolvency & Bankruptcy Code in 2016, the company initiated corporate insolvency resolution process. Partha Kamal Sen was appointed as the Resolution Professional. The resolution plan proposed the closure of the company by repaying debts to stakeholders, supported by a budgetary allocation from the Ministry of Railways. The Committee of Creditors (CoC) approved the resolution plan with a 100% voting share. Objections were raised by ex-employees regarding unpaid pay revision arrears and by an intervener, Industrial Services, concerning a money suit filed

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## Issues and analysis

### Issue 1: Whether the resolution plan submitted by the Resolution Professional meets the requirements of …

**Ratio:** Section 30(2) of the Insolvency & Bankruptcy Code, 2016, specifies the requirements

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**Reasoning:** The court found that the resolution plan was approved by the CoC with a 100% voting

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**Interpretation:** Section 30(2) is interpreted to ensure that the resolution plan adequately

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**Application:** In this case, the court applied the requirements of section 30(2) to the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Burn Standard…
- **Respondents:** Burn Standard…

## Timeline

- **1994-01-01 — Reference t…**: Burn Standard Co. Ltd. approached the Board of Industrial and Financial Reconstruction…
- **1995-01-20 — BIFR Ord…**: BIFR declared Burn Standard…

## 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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