# In the matter of Gupta Synthetics Limited IA 1016 of 2020 in CP (IB) 2889-MB-C-II-2019

> NCLT judgment dated 2020-07-14. Citation: TCN-2020-NCLT-01039. The case involves an application for liquidation of Gupta Synthetics Limited under Section…

- **Court:** NCLT
- **Order date:** 14 Jul 2020
- **Citation:** TCN-2020-NCLT-01039
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gupta-synthetics-limited-ia-1016-of-2020-in-cp-ib-2889-mb-c-ii-2019-554427bb

## Summary

### Background

The case involves an application for liquidation of Gupta Synthetics Limited under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016. The initial petition against the Corporate Debtor was filed by Kotak Mahindra Bank Ltd under Sections 433 and 434 of the Companies Act, 2013 in the High Court of Bombay, which was later transferred to NCLT. The NCLT admitted the case under Section 7 of the I&B Code. Ms. Jovita Reema Mathias was appointed as the Interim Resolution Professional (IRP). The IRP made a public announcement and convened the first meeting of the Committee of Creditors (CoC). A major fire had previously damaged the factory unit, impacting recovery prospects. The CoC approved the liquidation of the Corporate Debtor with a majority vote of 71.54%.

## Facts

Kotak Mahindra Bank Ltd filed a petition against Gupta Synthetics Limited under Sections 433 and 434 of the Companies Act, 2013, which was transferred to NCLT. The NCLT admitted the case under Section 7 of the I&B Code. Ms. Jovita Reema Mathias was appointed as the Interim Resolution Professional (IRP). A public announcement was made, and claims were invited. The main factory unit suffered a major fire in January 2018, severely damaging machinery. The IRP convened the first meeting of the Committee of Creditors (CoC) on 25.10.2019. The CoC approved liquidation with 71.54% majority voting on 06.12.2019. As of 31st March 2017, the Corporate Debtor had liabilities of Rs. 312.80 Crores against assets of Rs. 144.10 Crores. Claims from Financial Creditors amounted to Rs.

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor, Gupta Synthetics Limited, under …

**Ratio:** Section 33(1) of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of

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**Reasoning:** The Committee of Creditors (CoC) approved the liquidation of the Corporate Debtor with a

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**Interpretation:** Section 33(1)(a) of the I&B Code provides the legal basis for initiating

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**Application:** In this case, the CoC approved the liquidation of Gupta Synthetics Limited with

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## Parties

- **Judges:** Janab Mohammed…; RavikumarDu…
- **Respondents:** Gupta Synthetics…; Kotak Mahindra…

## Timeline

- **2018-01-01 — Fire Inc…**: A major fire occurred in the main…
- **2019-06-06 — Transfer t…**: The petition filed by Kotak Mahindra Bank Ltd was transferred from the High Court of…

## Legal provisions

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

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