# In the matter of Gandhmardhan Sponge Industries Private Limited IA No. 1195-KB-2020 in CP (IB) No. 180-KB-2019

> NCLT judgment dated 2021-03-25. Citation: TCN-2021-NCLT-02573. The case involves an application under section 30(6) and section 31(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 25 Mar 2021
- **Citation:** TCN-2021-NCLT-02573
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gandhmardhan-sponge-industries-private-limited-ia-no-1195-kb-2020-in-cp-ib-no-18-9e2bd77a

## Summary

### Background

The case involves an application under section 30(6) and section 31(1) of the Insolvency and Bankruptcy Code, 2016 for the approval of a Resolution Plan for Gandhmardhan Sponge Industries Private Limited, the Corporate Debtor. The underlying company petition was filed by ATO (I) Limited against Gandhmardhan Sponge Industries Private, and it was admitted into Corporate Insolvency Resolution Process (CIRP) on 04.10.2019. The Resolution Professional (RP) made public announcements regarding the initiation of CIRP and called for proof of claims from creditors. The RP received four Expressions of Interest (EoIs) but no resolution plan until the deadline. The CoC resolved to republish Form G with modified eligibility criteria and applied for an extension of the CIRP period.

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## Facts

Gandhmardhan Sponge Industries Private Limited (GSIPL) was incorporated in 1977 for mining minerals and providing air transport services. They acquired leasehold rights for Iron Ore mining in Keonjhar District, Orissa, in 1993, renewed in 2015. The mining lease expired on 31.03.2020. A Writ Petition (Civil) 114 of 2014 was filed in the Supreme Court against excess/illegal mining in Orissa, leading to a stay on lease renewal. The Supreme Court directed payment of 100% compensation for excess production on 02.08.2017. The State Government raised a demand for compensation of Rs. 273,72,48,438.40 and interest of Rs. 22,62,82,063/-. Mining activities were stopped. GSIPL also owned a hotel in Puri, which became non-operational due to a cyclone. The company faced financial

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## Issues and analysis

### Issue 1: Whether the Resolution Plan submitted by Bhuwalka Developments Pvt. Ltd. complies with the …

**Ratio:** Section 30(6) and Section 31(1) of the Insolvency and Bankruptcy Code, 2016, read with

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**Reasoning:** The Adjudicating Authority considered the submissions made by the Resolution Professional

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**Interpretation:** The Insolvency and Bankruptcy Code, 2016, aims to provide a framework for the

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**Application:** In this case, the Adjudicating Authority found that the Resolution Plan

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## Parties

- **Judges:** Rajasekha…
- **Appellants:** ATO (I) L…
- **Respondents:** Gandhmardhan…

## Timeline

- **2019-10-04 — Admission in…**: The company petition filed by ATO (I) Limited against Gandhmardhan Sponge Industries…
- **2019-10-07 — Public Announcement in…**: The Resolution Professional made public announcements regarding the initiation of CIRP in…

## 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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