# In the matter of Deepak Pneumatics Pvt. Ltd. (IB)-616(ND)2018

> NCLT judgment dated 2020-01-15. Citation: TCN-2020-NCLT-02325. The Corporate Debtor filed a petition under Section 10 of the IBC. The company's assets had…

- **Court:** NCLT
- **Order date:** 15 Jan 2020
- **Citation:** TCN-2020-NCLT-02325
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/deepak-pneumatics-pvt-ltd-ib-616nd2018-9678f4cb

## Summary

### Background

The Corporate Debtor filed a petition under Section 10 of the IBC. The company's assets had been disposed of over the years to meet financial liabilities. After the petition was filed, workmen filed claims and formed a Committee of Creditors (COC). However, the COC members were unwilling to contribute towards the costs of the Corporate Insolvency Resolution Process (CIRP). The fees of the Interim Resolution Professional (IRP) were paid from the personal account of one of the Directors.

## Facts

The Corporate Debtor, M/s. Deepak Pneumatics Pvt. Ltd., filed a petition under Section 10 of the Insolvency and Bankruptcy Code (IBC). The company had already disposed of its assets to meet financial liabilities. Workmen filed claims and formed a Committee of Creditors (COC), but they were unwilling to contribute to the costs of the CIRP. The IRP's fees were paid from a Director's personal account. No assets were available to attract a resolution plan, and the 270-day CIRP period had expired. The COC's unwillingness to contribute towards expenses and the lack of assets were key factors in the decision.

## Issues and analysis

### Issue 1: Whether the company should be liquidated given the lack of assets and the unwillingness of the COC …

**Ratio:** A company should be wound up when there are no assets to liquidate and the COC is

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**Reasoning:** The court reasoned that proceeding with liquidation would be futile because there were no

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**Interpretation:** This interprets the IBC to mean that liquidation is not a viable option when

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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:** L. N. G…; Ina Mal…
- **Respondents:** M/s. Deepak…

## Timeline

- **N/A — Petition…**: The Corporate Debtor filed a…
- **N/A — COC Form…**: Workmen filed claims and…

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