# 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-01602. The case involves an application (MA/576/2019) moved by Ajay Agarwal, claiming to be the…

- **Court:** NCLT
- **Order date:** 11 Mar 2020
- **Citation:** TCN-2020-NCLT-01602
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashok-magnetics-ltd-ma-576-2019-in-cp-551-ib-2017-7a41e28c

## Summary

### Background

The case involves an application (MA/576/2019) moved by Ajay Agarwal, claiming to be the Promoter/Director of the Corporate Debtor, 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. The Corporate Insolvency Resolution Process (CIRP) was initiated against Ashok Magnetics Limited based on a petition filed by Central Bank of India and State Bank of India under Section 7 of the I&B Code, 2016. V. Nagarajan was appointed as the Interim Resolution Professional (IRP) and later as the Resolution

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## Facts

Ajay Agarwal, claiming to be the Promoter/Director of Ashok Magnetics Limited, filed an application (MA/576/2019) seeking an interim injunction against the sale of the Corporate Debtor's assets by the Liquidator and a direction to submit a Scheme of Compromise/Arrangement under Section 230 of the Companies Act, 2013. Ashok Magnetics Limited is currently under liquidation. The CIRP was initiated against Ashok Magnetics Limited by Central Bank of India and State Bank of India under Section 7 of the I&B Code, 2016. V. Nagarajan was appointed as the IRP and later as the RP. The applicant had previously moved an application (MA/478/2018) seeking reconsideration of the rejection of the resolution plan, which was rejected. The applicant then filed an appeal before the

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## Issues and analysis

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

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

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**Reasoning:** The court relies 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 a mechanism for a compromise

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**Application:** The court directs 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…
- **Advocates:** R. Sankar…; M.L. Ga…; +1 more

## Timeline

- **2017-09-04 — CIRP Init…**: CIRP was initiated against Ashok…
- **2017-10-19 — IRP Appointme…**: V. Nagarajan was appointed as RP…

## 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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