# In the matter of Jaimurugan Textiles Limited MA-544-IB-2018 in CP-104A-(IB)-CB-2018

> NCLT judgment dated 2018-12-18. Citation: TCN-2018-NCLT-00056. The case involves M/s.Jaimurugan Textiles Limited, a company undergoing Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 18 Dec 2018
- **Citation:** TCN-2018-NCLT-00056
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jaimurugan-textiles-limited-ma-544-ib-2018-in-cp-104a-ib-cb-2018-5ee98dc2

## Summary

### Background

The case involves M/s.Jaimurugan Textiles Limited, a company undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP), Shri. Mahalingam Suresh Kumar, filed an application before the National Company Law Tribunal (NCLT), Chennai, seeking liquidation of the Corporate Debtor. The CIRP was initiated based on an order dated 04.04.2018, and a moratorium was declared. Mrs. Revathi Sridharan was initially appointed as the Interim Resolution Professional (IRP). The IRP convened the first Committee of Creditors (COC) meeting on 03.05.2018, where the Applicant (Shri. Mahalingam Suresh Kumar) was appointed as the Resolution Professional. Subsequent COC meetings were held to discuss the company's

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## Facts

M/s.Jaimurugan Textiles Limited underwent CIRP as per an order dated 04.04.2018. A moratorium was declared, and Mrs. Revathi Sridharan was appointed as IRP. Shri. Mahalingam Suresh Kumar was later appointed as RP. The company was previously engaged in yarn manufacturing but became unviable, leading to the sale of assets to repay bank loans. The COC held multiple meetings. In the 2nd COC meeting on 09.06.2018, it was noted that the company owned no immovable properties, and the RP was authorized to appoint valuers for current assets. The COC decided against issuing an EOI due to the lack of physical assets and the infeasibility of recommencing operations. In the 3rd COC meeting on 15.09.2018, the COC, constituted by three financial creditors holding 100% voting share,

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, M/s.Jaimurugan Textiles Limited, should be liquidated under Section …

**Ratio:** Section 33(2) of the Insolvency and Bankruptcy Code, 2016, allows the Adjudicating

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**Reasoning:** The COC recommended liquidation due to the absence of a resolution plan and the lack of

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**Interpretation:** Section 33(2) grants the NCLT the power to order liquidation when resolution

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**Application:** In this case, the COC unanimously decided to liquidate the Corporate Debtor due

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** Shri. Mahalingam…
- **Respondents:** M/s.Jaimurugan…; Shri. Vigneshraj…

## Timeline

- **2018-04-04 — CIRP Init…**: Order passed initiating Corporate Insolvency Resolution Process (CIRP) and declaring…
- **2018-04-01 — Claims Ad…**: Claims were originally…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(1) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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