# In the matter of Arun Shelters Pvt. Ltd. I.A. No. 187 & 195-2020 in C.P. (IB)No. 305-BB-2019

> NCLT judgment dated 2020-06-29. Citation: TCN-2020-NCLT-01105. The case involves a dispute over the reconstitution of the Committee of Creditors (CoC) in the…

- **Court:** NCLT
- **Order date:** 29 Jun 2020
- **Citation:** TCN-2020-NCLT-01105
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arun-shelters-pvt-ltd-ia-no-187-195-2020-in-cp-ibno-305-bb-2019-0dbd1222

## Summary

### Background

The case involves a dispute over the reconstitution of the Committee of Creditors (CoC) in the Corporate Insolvency Resolution Process (CIRP) of M/s.Arun Shelters Pvt. Ltd. Kotak Mahindra Bank, the financial creditor, filed an application seeking to set aside the unilateral action of the Interim Resolution Professional (IRP) in reconstituting the CoC. The CIRP was initiated based on an order dated January 31, 2020. The IRP initially constituted a CoC limited to the 'Auroville' project, following an NCLAT judgment. Subsequently, the IRP sought to reconstitute the CoC, leading to the current dispute.

## Facts

M/s. Kotak Mahindra Bank Ltd., a financial creditor, initiated CIRP against M/s. Arun Shelters Pvt. Ltd. The CIRP was admitted on January 31, 2020, and Mr. Pankaj Srivastava was appointed as the IRP. Initially, the IRP constituted a CoC limited to the 'Auroville' project, based on an NCLAT judgment regarding project-specific CIRP. The IRP then sought to reconstitute the CoC, allowing claims from other creditors, which led to objections from Kotak Mahindra Bank. The IRP conducted three CoC meetings before attempting to reconstitute the CoC. The applicant contended that the IRP's action was unilateral and violated the IBC. The Resolution Professional argued that the reconstitution was necessary to rectify a mistake and align with the NCLAT judgment. The same legal

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## Issues and analysis

### Issue 1: Whether the Interim Resolution Professional (IRP) can unilaterally reconstitute the Committee of …

**Ratio:** The IRP's duties, as outlined in Section 18 of the IBC, primarily involve collating

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**Reasoning:** The court reasoned that the IRP's action in unilaterally reconstituting the CoC was not

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**Interpretation:** The interpretation of Section 18 of the IBC suggests that the IRP's role is to

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**Application:** In this case, the IRP's decision to reconstitute the CoC was deemed invalid

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s.Kotak…
- **Respondents:** M/s.Arun Shelters…

## Timeline

- **2020-01-31 — CIRP Init…**: CIRP initiated against M/s.Arun Shelters Pvt.…
- **2020-02-04 — Public Annou…**: IRP published a public announcement calling…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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