# In the matter of Firestar Diamond International Pvt. Ltd. MA 167-2020 in CP(IB)2096 (MB)-2019

> NCLT judgment dated 2020-02-26. Citation: TCN-2020-NCLT-01795. The case involves an application (MA 167/2020) filed by the Interim Resolution Professional…

- **Court:** NCLT
- **Order date:** 26 Feb 2020
- **Citation:** TCN-2020-NCLT-01795
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/firestar-diamond-international-pvt-ltd-ma-167-2020-in-cpib2096-mb-2019-79f0fe35

## Summary

### Background

The case involves an application (MA 167/2020) filed by the Interim Resolution Professional (IRP) seeking a liquidation order for the Corporate Debtor, Firestar Diamond International Pvt Ltd, under Section 33(2) of the Insolvency and Bankruptcy Code (IBC), 2016. The petition under Section 7 of IBC was admitted on 25.09.2019. The Committee of Creditors (CoC) decided against a resolution plan and opted for liquidation due to a lack of business prospects, insufficient assets, and existing legal complications, including decrees passed by the DRT and attachment of assets by the ED.

## Facts

Mr. Ram Ratan Kanoongo, the Interim Resolution Professional (IRP), filed an application seeking liquidation of Firestar Diamond International Pvt Ltd, the Corporate Debtor. An earlier petition under Section 7 of the IBC was admitted on 25.09.2019. A public announcement was made, inviting creditors to submit their claims by 24.10.2019. The Committee of Creditors (CoC) was formed on 01.11.2019. In a meeting on 16.11.2019, the CoC decided against a resolution plan, opting for liquidation under Section 33(2) of the IBC due to a lack of business prospects and insufficient assets. The CoC noted existing decrees from the DRT and asset attachments by the ED. In a subsequent meeting on 02.12.2019, the CoC approved the liquidation with 98.25% voting share and appointed Mr.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor should be liquidated under Section 33(2) of the IBC, 2016, given the …

**Ratio:** Section 33(2) of the IBC, 2016, allows for liquidation if the CoC decides against a

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**Reasoning:** The CoC, comprising the creditors, determined that a resolution plan was not feasible due

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**Interpretation:** Section 33(2) provides the legal basis for initiating liquidation when the CoC

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**Application:** The CoC's decision, supported by valid reasons, justified the application of

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## Parties

- **Judges:** SUCHITRAKAN…; V. Nallasen…
- **Appellants:** Ram Ratan K…
- **Respondents:** Firestar Diamond…; Corporatio…
- **Advocates:** Pulkit S…; Payal Upa…; +1 more

## Timeline

- **2019-09-25 — Admission of Section 7…**: The petition filed under Section 7 of the…
- **2019-10-24 — Deadline for Submission…**: Creditors were required to submit proof of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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