# In the matter of Coastal Projects Ltd. CP(IB) No. 593-KB-2017

> NCLT judgment dated 2018-12-06. Citation: TCN-2018-NCLT-00163. State Bank of India filed CP(IB) No. 593/KB/2017 to initiate Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 6 Dec 2018
- **Citation:** TCN-2018-NCLT-00163
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/coastal-projects-ltd-cpib-no-593-kb-2017-a65e2186

## Summary

### Background

State Bank of India filed CP(IB) No. 593/KB/2017 to initiate Corporate Insolvency Resolution Process (CIRP) against Coastal Projects Limited. An Interim Resolution Professional (IRP) was appointed, and a public announcement was made to invite prospective resolution applicants. Only one resolution plan was submitted by Mantena Engitec Private Limited. The resolution plan underwent negotiations and deliberations, but the Committee of Creditors (CoC) did not approve it, with 88.04% voting against it. Several applications were filed during the CIRP period, including those by operational creditors claiming non-admission of their claims and by the resolution applicant seeking reconsideration of the plan.

## Facts

State Bank of India initiated CIRP against Coastal Projects Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application was admitted on January 5, 2018, and Mr. Ravi Sankar Devarakonda was appointed as the Interim Resolution Professional. A public announcement was made, and only one resolution plan was received from Mantena Engitec Private Limited. The resolution plan was placed before the Committee of Creditors (CoC) but was not approved, with 88.04% of the members voting against it. The extended period of CIRP expired on October 1, 2018. Several applications were filed, including those by operational creditors and the resolution applicant seeking reconsideration of the plan. The CoC decided to proceed with liquidation. The Resolution

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## Issues and analysis

### Issue 1: Whether the rejection of the Resolution Plan by …

**Ratio:** The decision of the Committee of Creditors should be based on sound reasons and should

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**Reasoning:** The court found that the rejection of the resolution plan was not based on sound reasons,

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**Interpretation:** The Committee of Creditors has the power to approve or reject a resolution

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**Application:** In this case, the court found that the CoC's rejection of the resolution plan

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## Parties

- **Judges:** Jinan…
- **Appellants:** State Bank of…
- **Respondents:** Coastal Projects…; Coastal Projects…

## Timeline

- **2017-01-01 — Filing of CP(IB) No.…**: State Bank of India filed CP(IB) No. 593/KB/2017 to initiate CIRP against Coastal…
- **2018-01-05 — Admission of Ap…**: The application was admitted, and Mr. Ravi Sankar Devarakonda was appointed as the…

## 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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