# In the matter of City Tiles Ltd. IA 165-2020 in C.P.(I.B) No. 56-NCLT-AHM-2019

> NCLT judgment dated 2020-07-02. Citation: TCN-2020-NCLT-01072. The case involves an application (IA 165 of 2020) filed in Company Petition (IB) No.…

- **Court:** NCLT
- **Order date:** 2 Jul 2020
- **Citation:** TCN-2020-NCLT-01072
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/city-tiles-ltd-ia-165-2020-in-cpib-no-56-nclt-ahm-2019-a9e6b43b

## Summary

### Background

The case involves an application (IA 165 of 2020) filed in Company Petition (IB) No. 56/NCLT/AHM/2019 under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IB Code) for the liquidation of the Corporate Debtor. The initial application, CP(IB)No. 56 of 2019, was filed by Financial Creditor M/s. AVV AD Avenue OPC Private Limited under Section 7 of the IB Code, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. This application was admitted on 2019-04-22, and Mr. Parag Sheth was appointed as Interim Resolution Professional (IRP).

## Facts

M/s. AVV AD Avenue OPC Private Limited, a Financial Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against City Tiles Limited by filing CP(IB)No. 56 of 2019 under Section 7 of the IB Code. The application was admitted on 2019-04-22, and Mr. Parag Sheth was appointed as Interim Resolution Professional (IRP). The Committee of Creditors (CoC) later decided to replace Mr. Sheth with Mr. Ravi Kapoor, who was appointed as Resolution Professional (RP) on 2019-07-18. The CoC then decided to extend the CIRP period by 90 days, which was approved on 2019-10-09. However, in its fourth meeting on 2020-01-07, the CoC resolved to liquidate City Tiles Limited due to the absence of any Expression of Interest (EOI). The RP then filed IA 165 of 2020 under Section 33

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can interfere with the commercial wisdom of the Committee of …

**Ratio:** The Adjudicating Authority has no jurisdiction to interfere with the commercial wisdom of

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**Reasoning:** The Adjudicating Authority relied on the K. Sasidhar's case and the Supreme Court's

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**Interpretation:** The principle of respecting the commercial wisdom of the CoC is a cornerstone

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**Application:** In this case, the CoC decided to liquidate the Corporate Debtor due to the

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Respondents:** City Tiles…

## Timeline

- **2019-04-22 — CIRP Init…**: Application filed by M/s. AVV AD Avenue OPC Private Limited under Section 7 of the IB…
- **2019-05-21 — CoC Meet…**: The Committee of Creditors (CoC) decided to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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