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

> NCLT judgment dated 2020-03-11. Citation: TCN-2020-NCLT-01598. The application MA/576/2019 was filed by Ajay Agarwal, the Promoter/Director of the Corporate…

- **Court:** NCLT
- **Order date:** 11 Mar 2020
- **Citation:** TCN-2020-NCLT-01598
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashok-magnetics-ltd-ma-576-2019-in-cp-551-ib-2017-3daa5d2c

## Summary

### Background

The application MA/576/2019 was filed by Ajay Agarwal, the Promoter/Director of the Corporate Debtor, Ashok Magnetics Limited, which is under liquidation. The applicant sought 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 financial creditors Central Bank of India and State Bank of India against Ashok Magnetics Limited. The CIRP was initiated, and V. Nagarajan was appointed as the Interim Resolution Professional (IRP), later replaced by RP. The Applicant moved an Application MA/478/2018

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## Facts

Ajay Agarwal, the Promoter/Director of Ashok Magnetics Limited, filed MA/576/2019 seeking an interim injunction against the sale of the Corporate Debtor's assets 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 by Central Bank of India and State Bank of India against Ashok Magnetics Limited, leading to the initiation of CIRP and the appointment of V. Nagarajan as IRP. The Applicant's resolution plan was rejected, leading to an order of liquidation. The NCLAT granted liberty to the Applicant to file the Scheme of Compromise or Arrangements. The Applicant submitted a revised Scheme offering Rs. 19 Crores against the liquidation value of Rs.9.55 Crores. The Liquidator

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority is required to follow the same principle as enunciated under …

**Ratio:** The Adjudicating Authority has to play dual role, one as the Adjudicating Authority under

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**Reasoning:** The court relied on the decision of the Hon'ble NCLAT in Y. Shivram Prasad -Vs- S.

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**Interpretation:** Section 230 of the Companies Act, 2013 provides 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 — Order for CIRP…**: The Authority admitted CP/551(IB)/CB/2017 and initiated the CIR Process against the…
- **2017-10-19 — IRP Appointe…**: In the 1st Meeting of the CoC,…

## Legal provisions

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

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