# In the matter of Jan Aahar Pvt. Ltd. (IB)-565(ND)2017

> NCLT judgment dated 2019-07-04. Citation: TCN-2019-NCLT-02687. The case involves a corporate debtor whose accounts with Axis Bank and IDBI Bank have been…

- **Court:** NCLT
- **Order date:** 4 Jul 2019
- **Citation:** TCN-2019-NCLT-02687
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jan-aahar-pvt-ltd-ib-565nd2017-6df9ed8b

## Summary

### Background

The case involves a corporate debtor whose accounts with Axis Bank and IDBI Bank have been closed after withdrawing all available amounts. After liquidating the Resolution Professional's (RP) dues, a balance of over Rs. 8 Lakhs was given to the Operational Creditor/petitioner/sole claimant, which they received as full and final settlement of their claim of Rs. 60 Lakhs. No assets or records of Ex-Directors were found. The available amount in the Corporate Debtor's bank account was used to meet CIR costs and partially liquidate the sole claimant's claim. With no assets available and no resolution plan received, liquidation was deemed necessary after 240 days. However, due to lack of funds, liquidation was considered futile.

## Facts

Naveen Chandok filed a case against Jan Aahar Pvt. Ltd. The Corporate Debtor's accounts with Axis Bank and IDBI Bank were closed, and all available amounts were withdrawn. After paying the RP's dues, Rs. 8 Lakhs was given to the Operational Creditor as full and final settlement of a Rs. 60 Lakhs claim. No assets or records of Ex-Directors were found. The Corporate Debtor's bank account was used to cover CIR costs and partially settle the claimant's claim. No resolution plan was received, and after 240 days, liquidation was considered. However, there were no funds to cover liquidation costs, making it a futile exercise. The key fact is the absence of assets and funds, rendering liquidation impractical.

## Issues and analysis

### Issue 1: Whether the Corporate Debtor should be subjected to liquidation proceedings given the absence of …

**Ratio:** Liquidation proceedings are typically initiated when a resolution plan is not approved or

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**Reasoning:** The court reasoned that initiating liquidation proceedings without any assets or funds

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**Interpretation:** The interpretation is that the IBC aims to maximize the value of assets and

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**Application:** In this case, since there were no assets available and no funds to cover the

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## Parties

- **Judges:** V.K. SUB…; Ina Mal…
- **Appellants:** Naveen Ch…
- **Respondents:** jan Aahar Pvt.…

## Timeline

- **2019-05-09 — Order Da…**: Order dated 9th May,…
- **2019-07-04 — Hearing…**: Hearing before the New Delhi Bench of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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