# In the matter of Aruna Hotels Limited IA-361-2021 in CP-597-IB-2017

> NCLT judgment dated 2021-06-04. Citation: TCN-2021-NCLT-02023. The application IA/361/2021 was filed in relation to CP/597/IB/2017. The Corporate Debtor,…

- **Court:** NCLT
- **Order date:** 4 Jun 2021
- **Citation:** TCN-2021-NCLT-02023
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aruna-hotels-limited-ia-361-2021-in-cp-597-ib-2017-981e97a1

## Summary

### Background

The application IA/361/2021 was filed in relation to CP/597/IB/2017. The Corporate Debtor, Aruna Hotels Limited, was initially ordered into CIRP by the Tribunal on 2017-11-17. The order was challenged before the NCLAT, which set aside the CIRP order. Subsequently, the Operational Creditor appealed to the Supreme Court, which upheld the Tribunal's original order, restoring the CIRP. After the CIRP was restored, the Resolution Professional (RP) filed MA/6/2021, stating that the Directors of the Corporate Debtor were not cooperating. The Directors then filed a Miscellaneous Application before the Supreme Court seeking to withdraw their application with liberty to approach the Committee of Creditors (CoC) for settlement under Section 12A of the IBC. The Tribunal directed

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## Facts

The Corporate Debtor, M/s. Aruna Hotels Limited, faced CIRP proceedings initiated by an Operational Creditor. The initial CIRP order was passed on 2017-11-17. The Resolution Professional (RP), V. Nagarajan, was appointed. The CIRP order was challenged and initially set aside by the NCLAT. However, the Supreme Court overturned the NCLAT's decision and restored the CIRP. Following the restoration of CIRP, the RP sought to constitute a new Committee of Creditors (CoC) consisting only of Operational Creditors, as the original Financial Creditors had withdrawn. The Directors of the Corporate Debtor filed a Miscellaneous Application before the Supreme Court seeking to withdraw their application with liberty to approach the CoC for settlement under Section 12A of the IBC. The

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) was justified in seeking to constitute a revised Committee …

**Ratio:** The legal principle is that the constitution of the CoC should reflect the creditors who

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**Reasoning:** The Tribunal reasoned that the RP's attempt to constitute a new CoC was not justified

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**Interpretation:** This interprets the IBC to mean that the composition of the CoC should remain

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**Application:** The Tribunal applied this principle by directing the RP to convene a meeting of

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** K.N. RAJA…
- **Respondents:** Aruna Hotels…; V. Naga…

## Timeline

- **2017-11-17 — CIRP Ord…**: Tribunal orders…
- **2018-07-16 — NCLAT Or…**: NCLAT sets aside the…

## 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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