# In the matter of Assam Company India Ltd. I.A. No. 24-2018 IN CP (IB)-20-GB-2017

> NCLT judgment dated 2018-04-26. Citation: TCN-2018-NCLT-01484. This case involves an application filed concerning the Corporate Insolvency Resolution Process…

- **Court:** NCLT
- **Order date:** 26 Apr 2018
- **Citation:** TCN-2018-NCLT-01484
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/assam-company-india-ltd-ia-no-24-2018-in-cp-ib-20-gb-2017-4c551353

## Summary

### Background

This case involves an application filed concerning the Corporate Insolvency Resolution Process (CIRP) of Assam Company India Ltd. The applicant challenges the eligibility criteria set by the Resolution Professional (RP) and Committee of Creditors (CoC) for prospective resolution applicants (PRAs), specifically the minimum tangible net worth (NTW) requirement of INR 400 crores. The applicant argues that this criterion is arbitrary, unreasonable, and excludes major players in the tea industry, which is the core business of the corporate debtor. The applicant seeks relaxation or modification of the eligibility criteria to allow for broader participation and ensure the best possible resolution plan for the ailing company.

## Facts

Assam Company India Ltd. is undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP) and Committee of Creditors (CoC) set eligibility criteria for prospective resolution applicants (PRAs), including a minimum tangible net worth (NTW) of INR 400 crores. An applicant challenged these criteria, arguing they are arbitrary, unreasonable, and exclude major tea industry players. Assam Company India Ltd. primarily operates in the tea industry, with some past involvement in the oil sector. The total admitted debt of the corporate debtor is approximately Rs. 1453.03 crores. The applicant contends that the NTW requirement is disproportionately high compared to other CIRP cases and fails to consider

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## Issues and analysis

### Issue 1: Whether the eligibility criteria, specifically the minimum tangible net worth (NTW) of Rs. 400 …

**Ratio:** The principle is that eligibility criteria for resolution applicants should be fair,

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**Reasoning:** The court finds the NTW requirement of Rs. 400 crores to be arbitrary and unreasonable

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**Interpretation:** The court interprets the Insolvency and Bankruptcy Code, 2016, as requiring a

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**Application:** The court applies the principle to the facts of the case, finding that the NTW

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## Parties

- **Judges:** P. K. S…
- **Appellants:** M.K. Shah Exports…
- **Respondents:** Assam Company…
- **Advocates:** J. Chow…; A. Sa…; +5 more

## Timeline

- **2017-01-01 — Application under…**: SREI Infrastructure Pvt. Ltd. filed an application under Section 7 of the Insolvency and…
- **2017-10-26 — CIRP init…**: The Authority admitted the application and…

## 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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