# In the matter of Central Inland Water Transport Corporation Ltd. C.A (IB) No. 791-KB-2018

> NCLT judgment dated 2018-09-28. Citation: TCN-2018-NCLT-00693. The case involves an application filed by the liquidator of Central Inland Water Transport…

- **Court:** NCLT
- **Order date:** 28 Sept 2018
- **Citation:** TCN-2018-NCLT-00693
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/central-inland-water-transport-corporation-ltd-ca-ib-no-791-kb-2018-19f510f5

## Summary

### Background

The case involves an application filed by the liquidator of Central Inland Water Transport Corporation Ltd. under Regulation 40(2) of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, and Section 59 of the Insolvency and Bankruptcy Code, 2016. The corporate debtor initiated voluntary liquidation. The liquidator sought suspension of the voluntary liquidation process because the corporate debtor had several pending litigations, and the claims against it exceeded the value of its assets, indicating that the company was not solvent, a prerequisite for voluntary liquidation. The corporate debtor was engaged in river services and faced operational bottlenecks, leading to losses. The Cabinet approved the dissolution of the

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## Facts

Central Inland Water Transport Corporation Ltd. initiated voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. Mr. Vinod Kumar Kothari was appointed as the liquidator. The company was engaged in river services between Calcutta and Assam, and Calcutta and Bangladesh, transporting oil for the Indian Oil Corporation. The company faced operational limitations and infrastructure bottlenecks, leading to losses since its inception. The Cabinet approved the dissolution of the corporate debtor on 31/08/2016. The Ministry of Shipping conveyed approval for the dissolution via a letter dated 06/09/2016. The Board of Directors passed a resolution on 25/11/2017, approving voluntary liquidation. A Board Meeting was called on 19/12/2017, and an

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## Issues and analysis

### Issue 1: Whether the voluntary liquidation process initiated by Central Inland Water Transport Corporation …

**Ratio:** Voluntary liquidation requires the corporate person to discharge its debts to the

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**Reasoning:** The court reasoned that the corporate debtor's insolvency and pending litigation made it

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**Interpretation:** The interpretation of Regulation 38 emphasizes the necessity of solvency and

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Jinan…
- **Appellants:** Vinod Kumar…
- **Respondents:** Central Inland…

## Timeline

- **2016-08-31 — Cabinet Ap…**: The Cabinet approved the…
- **2016-09-06 — Ministry of Shipping…**: The Ministry of Shipping conveyed approval for the dissolution of Central Inland Water…

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