# In the matter of Carnation Auto India Ltd. (IB)-302-(ND)-2017

> NCLT judgment dated 2018-08-01. Citation: TCN-2018-NCLT-01024. The case involves an application under Section 33(1) of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 1 Aug 2018
- **Citation:** TCN-2018-NCLT-01024
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/carnation-auto-india-ltd-ib-302-nd-2017-8bba2f65

## Summary

### Background

The case involves an application under Section 33(1) of the Insolvency and Bankruptcy Code (IBC). The Resolution Professional (RP) informed the Adjudicating Authority that the sole resolution applicant withdrew their application. The resolution plan was not approved by the Committee of Creditors (COC), with Punjab National Bank (PNB), the largest claimant with 66.36% voting power, rejecting it. Another financial claimant, Venture Capital Funds Ltd., was keen on a resolution plan.

## Facts

An application was filed under Section 33(1) of the IBC. The sole resolution applicant, Smile Internet Services LLP, withdrew their application. The resolution plan was not approved by the COC, with PNB, the largest claimant holding 66.36% voting power, rejecting it. Venture Capital Funds Ltd. was interested in a resolution plan. The 13th COC meeting minutes, dated June 22, 2018, show that liquidation was discussed. Another application, CA 261/2018, was filed under Section 60(2) of the Code. The RP, Mr. Arvind Garg, supported the application for liquidation. The relevance of PNB's rejection is that it held the majority voting power, making the resolution plan unviable without their approval.

## Issues and analysis

### Issue 1: Whether the application under Section 33(1) of the IBC should be allowed given the withdrawal of …

**Ratio:** When a resolution plan is not approved by the COC and the resolution applicant withdraws,

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**Reasoning:** The court reasoned that since there was no viable resolution plan due to the withdrawal

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**Interpretation:** Section 33(1) of the IBC allows for the initiation of liquidation proceedings

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**Application:** The resolution applicant withdrew, and the COC, including the major creditor

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## Parties

- **Judges:** Deepa Kr…; Ina Mal…; +1 more
- **Appellants:** Punjab National…
- **Respondents:** Carnation Auto…; M/s Carnation…

## Timeline

- **2018-06-22 — 13th COC M…**: The 13th meeting of the COC was held, during which the proposal for liquidation was…
- **2018-08-01 — Hearing…**: Hearing before the New Delhi Bench of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(2) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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