# 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-01597. 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-01597
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashok-magnetics-ltd-ma-1344-576-2019-in-cp-551-ib-2017-fa6d911e

## 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. The applicant seeks an interim injunction against the sale of the corporate debtor's assets by the liquidator until a scheme of compromise is approved, and a direction to the liquidator to submit a scheme of compromise/arrangement under Section 230 of the Companies Act, 2013. CP/551(IB)/CB/2017 was filed under Section 7 of the I&B Code, 2016 by Central Bank of India and State Bank of India against Ashok Magnetics Limited. The CIRP was initiated on 04.09.2017, and V. Nagarajan was appointed as the Interim Resolution Professional (IRP), later appointed as RP after the first CoC meeting on 19.10.2017.

## 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 and a direction to the liquidator to submit a scheme of compromise/arrangement under Section 230 of the Companies Act, 2013. Ashok Magnetics Limited is currently under liquidation. CP/551(IB)/CB/2017 was filed by Central Bank of India and State Bank of India against Ashok Magnetics Limited under Section 7 of the I&B Code, 2016. The CIRP was initiated on 04.09.2017, and V. Nagarajan was appointed as the Interim Resolution Professional (IRP), later appointed as RP after the first CoC meeting on 19.10.2017. The Hon'ble NCLAT had previously granted liberty to the applicant to

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## Issues and analysis

### Issue 1: Whether the Tribunal should grant an interim injunction against the sale of the assets of the …

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

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**Reasoning:** The court considered the applicant's request for an injunction, taking into account the

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**Interpretation:** Section 230 of the Companies Act, 2013 allows for a scheme of compromise or

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**Application:** The court directed the liquidator to constitute the 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 — CIRP Init…**: CIR Process was initiated…
- **2017-10-19 — RP Appoin…**: IRP was appointed as RP in…

## 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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