# In the matter of K. K. Kadri Paper Mills Pvt. Ltd. IA 638-2019 in CP(IB) 407-2018

> NCLT judgment dated 2020-09-08. Citation: TCN-2020-NCLT-00685. The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against K.K. Kadri…

- **Court:** NCLT
- **Order date:** 8 Sept 2020
- **Citation:** TCN-2020-NCLT-00685
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/k-k-kadri-paper-mills-pvt-ltd-ia-638-2019-in-cpib-407-2018-11575e59

## Summary

### Background

The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against K.K. Kadri Paper Mills Pvt Ltd. The CIRP was triggered by an application filed by a Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016. An IRP was appointed, and a Committee of Creditors (COC) was formed. The COC was informed about the deteriorated condition of the Corporate Debtor's plant and machinery, making a restart of operations unfeasible. The suspended Board of Management confirmed this. In its first meeting on September 5, 2019, the COC decided to pursue liquidation. The RP filed an application for liquidation. The NCLAT directed the IRP to ensure the company remains a going concern. The Adjudicating Authority considered awaiting the outcome of an

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## Facts

The Corporate Debtor, K.K. Kadri Paper Mills Pvt Ltd, was admitted into Corporate Insolvency Resolution Process (CIRP) following an application by a Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority ordered the CIRP on 2019-07-25. An Interim Resolution Professional (IRP) was appointed, who then constituted a Committee of Creditors (COC). The COC was informed that the Corporate Debtor's plant and machinery were in poor condition, preventing the resumption of operations. The suspended Board of Management confirmed this assessment. The COC, in its first meeting on 2019-09-05, decided to pursue liquidation. The RP filed an application for liquidation. The admission of the Corporate Debtor into CIRP was challenged

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor should be approved based on the …

**Ratio:** The Committee of Creditors (COC) is empowered to take a decision to liquidate the

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**Reasoning:** The Adjudicating Authority found that the application for liquidation was filed

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**Interpretation:** Section 33(2) grants the COC the authority to decide on liquidation, but this

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**Application:** In this case, the Adjudicating Authority determined that the COC's decision to

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Shyam Sunda…
- **Respondents:** K.K. Kadri Paper…; M/s K.K. Kadri…

## Timeline

- **2019-07-25 — CIRP Init…**: Corporate Debtor admitted into Corporate Insolvency Resolution Process (CIRP) by the…
- **2019-09-05 — COC Deci…**: Committee of Creditors (COC) decides to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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