# In the matter of Ashok Magnetics Ltd. MA-1344 & 576-2019 in CP-551-IB-2017

> NCLT judgment dated 2020-03-11. Citation: TCN-2020-NCLT-01601. The case involves an application (MA/576/2019) filed by Ajay Agarwal, claiming to be the…

- **Court:** NCLT
- **Order date:** 11 Mar 2020
- **Citation:** TCN-2020-NCLT-01601
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashok-magnetics-ltd-ma-1344-576-2019-in-cp-551-ib-2017-b7b718b4

## Summary

### Background

The case involves an application (MA/576/2019) filed by Ajay Agarwal, claiming to be the Promoter/Director of Ashok Magnetics Limited, which is under liquidation. Agarwal sought an interim injunction against the sale of the corporate debtor's assets by the liquidator until a scheme of compromise is approved. CP/551(IB)/CB/2017 was filed under Section 7 of the I&B Code by Central Bank of India and State Bank of India against Ashok Magnetics Limited, which was admitted on 04.09.2017. The CIRP was initiated, and V. Nagarajan was appointed as the Interim Resolution Professional (IRP), later replaced by RP after the first CoC meeting on 19.10.2017. The applicant moved MA/478/2018 seeking direction to the RP and CoC to reconsider their rejection of the resolution plan.

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## Facts

Ajay Agarwal, claiming to be the Promoter/Director of Ashok Magnetics Limited, filed MA/576/2019 seeking an interim injunction against the sale of the corporate debtor's assets by the liquidator. Ashok Magnetics Limited is under liquidation. CP/551(IB)/CB/2017 was initiated by Central Bank of India and State Bank of India under Section 7 of the I&B Code. The CIRP was initiated on 04.09.2017, and V. Nagarajan was appointed as IRP. The applicant had previously moved MA/478/2018 seeking reconsideration of the rejected resolution plan, which was rejected on 09.11.2018, leading to a liquidation order. The NCLAT granted liberty to the applicant to file a Scheme of Compromise. The proposed Scheme of Compromise offers Rs. 19 Crores against the liquidation value of Rs.9.55

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## Issues and analysis

### Issue 1: Whether the Hon'ble Tribunal may be pleased to grant an interim injunction against the sale of the …

**Ratio:** The Adjudicating Authority has the power to pass orders under Section 230 of the

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**Reasoning:** The court considered the NCLAT's order granting liberty to the applicant to file a Scheme

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**Interpretation:** Section 230 of the Companies Act, 2013, provides a mechanism for a compromise

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**Application:** The court directed the liquidator to constitute a CoC and place all three

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Ajay Ag…
- **Respondents:** Ashok Magnetics…; Ashok Magnetics…

## Timeline

- **2017-09-04 — Admission of CP/551(IB)/…**: CP/551(IB)/CB/2017 filed by Central Bank of India and State Bank of India against Ashok…
- **2017-10-19 — First Meeting…**: The first meeting of the CoC was held,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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