# In the matter of Galaxy Cosmetics Pvt. Ltd. MA-168-2019 In CP-600-IB-2018

> NCLT judgment dated 2019-02-28. Citation: TCN-2019-NCLT-04644. The Resolution Professional sought a 90-day extension of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 28 Feb 2019
- **Citation:** TCN-2019-NCLT-04644
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/galaxy-cosmetics-pvt-ltd-ma-168-2019-in-cp-600-ib-2018-ac780bc6

## Summary

### Background

The Resolution Professional sought a 90-day extension of the Corporate Insolvency Resolution Process (CIRP) based on a resolution passed by the Committee of Creditors (CoC) on February 22, 2019. The Corporate Debtor purportedly lacks property, but receivables exist, for which an application has been filed under Section 60(5) of the Insolvency and Bankruptcy Code (I&B Code), 2016.

## Facts

The Resolution Professional requested a 90-day extension of the CIRP, supported by a CoC resolution dated February 22, 2019. The Corporate Debtor allegedly has no property, but receivables exist, leading to an application under Section 60(5) of the I&B Code, 2016. The Resolution Professional argued that if the application favors the Corporate Debtor, the receivables could satisfy the Operational Creditor's claim. The court found this contingent with no immediate recovery prospects. The CIRP period was expiring.

## Issues and analysis

### Issue 1: Whether the application for a 90-day extension of the Corporate Insolvency Resolution Process …

**Ratio:** An extension of the CIRP period should only be granted if there are valid reasons and

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**Reasoning:** The court reasoned that no valid reasons were provided for the extension of the CIRP. The

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**Interpretation:** The court interpreted the provisions related to CIRP extensions to require a

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**Application:** The court applied the ratio to the facts by finding that the contingent nature

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** MATHUR SABHAPATHI…
- **Respondents:** GALAXY COSMETICS…

## Timeline

- **2019-02-22 — CoC Resol…**: The Committee of Creditors (CoC) passed a resolution supporting the extension of the CIRP…
- **2019-02-28 — Court He…**: The National Company Law Tribunal (NCLT) heard the application for a 90-day extension of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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