# In the matter of Cethar Limited MA-457-2018 in CP-511-IB-2017

> NCLT judgment dated 2021-04-01. Citation: TCN-2021-NCLT-02493. The case involves an application by Asset Reconstruction Company India Limited (ARCIL), acting…

- **Court:** NCLT
- **Order date:** 1 Apr 2021
- **Citation:** TCN-2021-NCLT-02493
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/cethar-limited-ma-457-2018-in-cp-511-ib-2017-5db9a75c

## Summary

### Background

The case involves an application by Asset Reconstruction Company India Limited (ARCIL), acting as trustee of Arcil AST – I Trust, against the liquidator of Cethar Limited, Venkatramanrao Nagarajan, and JM Financial Asset Reconstruction Company Ltd. Cethar Limited had borrowed from IDFC Bank, defaulted, and was declared a Non-Performing Asset (NPA). IDFC Bank assigned the debt to ARCIL. ARCIL initiated recovery proceedings. Subsequently, Lloyds Insulations India Ltd. filed an application under Section 9 of IBC, 2016, leading to CIRP initiation against Cethar Limited and appointment of an Interim Resolution Professional. With no viable resolution plan, liquidation was ordered on April 25, 2018. ARCIL, a secured creditor, expressed willingness to stand outside liquidation

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## Facts

Cethar Limited defaulted on a loan from IDFC Bank, leading to its account being declared an NPA. IDFC Bank assigned the debt to Asset Reconstruction Company India Limited (ARCIL). Lloyds Insulations India Ltd. initiated CIRP against Cethar Limited under Section 9 of IBC, 2016. Liquidation was ordered on April 25, 2018. ARCIL, a secured creditor, sought to stand outside the liquidation process under Section 52 of IBC, 2016, requesting possession of assets to proceed under SARFAESI Act. The liquidator did not hand over the assets. Unit VII, a factory unit, is situated at Boothagudi and Melapachangudi Village, Illupur Taluk, Viralimalai, Pudukottai District, consisting of 164.05 acres. ARCIL claimed exclusive charge over 28.41 acres and 13.60 acres, and first pari passu

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## Issues and analysis

### Issue 1: Whether the amended Regulation 21A of the IBBI (Liquidation Process) Regulations, 2016 which came …

**Ratio:** The cardinal principle in the rule of law is that every statute is prospective in nature

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**Reasoning:** The Tribunal referred to the IBBI circular clarifying that the amended regulations are

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**Interpretation:** The IBBI's circular clarifies that amendments to liquidation regulations apply

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**Application:** Since the liquidation process commenced before the effective date of the

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Cethar Li…; Venkatramanrao…

## Timeline

- **2017-06-16 — CIRP Init…**: Tribunal admitted application under Section 9 of IBC, 2016 filed by Lloyds Insulations…
- **2018-04-25 — Liquidation…**: Corporate Debtor was ordered for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52(4) — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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