# In the matter of Aqua Designs India Pvt. Ltd., CA/341/CAA/2020 in CP/1022/IB/2018

> NCLT judgment dated 2021-07-05. Citation: TCN-2021-NCLT-01859. The application CA/342/CAA/2020 in CP/1022/IB/2018 was filed under Section 230(1) of the…

- **Court:** NCLT
- **Order date:** 5 Jul 2021
- **Citation:** TCN-2021-NCLT-01859
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aqua-designs-india-pvt-ltd-ca341caa2020-in-cp1022ib2018-084fc52b

## Summary

### Background

The application CA/342/CAA/2020 in CP/1022/IB/2018 was filed under Section 230(1) of the Companies Act, 2013, seeking approval of a scheme. The Adjudicating Authority had previously raised questions about the scheme's viability in an order dated 2021-03-19. The liquidator sought to withdraw the application, stating that he could not obtain necessary answers regarding the project's funding.

## Facts

The liquidator, C. Ramasubramaniam, representing M/S Aqua Designs India Pvt Ltd, filed an application CA/342/CAA/2020 in CP/1022/IB/2018 under Section 230(1) of the Companies Act, 2013, seeking approval of a scheme. The Adjudicating Authority had previously raised questions about the scheme's viability in an order dated 2021-03-19. The liquidator then sought to withdraw the application, stating that he could not obtain necessary answers regarding the project's funding. The court observed that the Liquidator should have conducted a preliminary investigation of the scheme received under Section 230(1) before filing the application, including verifying the funding source and the investors.

## Issues and analysis

### Issue 1: Whether the Liquidator should conduct a preliminary investigation of a scheme received under …

**Ratio:** A liquidator has a duty to conduct a preliminary investigation of any scheme received

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**Reasoning:** The court reasoned that a preliminary investigation is necessary to ensure that the

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**Interpretation:** Section 230(1) of the Companies Act, 2013, requires a liquidator to conduct a

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**Application:** In this case, the Liquidator failed to conduct a preliminary investigation of

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** C. Ramasubramaniam…
- **Respondents:** M/S Aqua Designs…
- **Advocates:** Vipin Wa…

## Timeline

- **2021-03-19 — Previous…**: The Adjudicating Authority raised elaborate questions regarding the viability of the…
- **2021-07-05 — Hearing…**: Hearing held on 2021-07-05 at 2.30…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 230(1) — Delegation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-230)

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