# In the matter of Karan Processors Pvt. Ltd. IA No. 426-2020 in CP (IB) No. 339-Chd-Hry-2019

> NCLT judgment dated 2020-11-26. Citation: TCN-2020-NCLT-00200. Ultratreat Industrial Services, through its proprietor Mr. Vishwadeep Azad, initiated a…

- **Court:** NCLT
- **Order date:** 26 Nov 2020
- **Citation:** TCN-2020-NCLT-00200
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/karan-processors-pvt-ltd-ia-no-426-2020-in-cp-ib-no-339-chd-hry-2019-db6b4f34

## Summary

### Background

Ultratreat Industrial Services, through its proprietor Mr. Vishwadeep Azad, initiated a Corporate Insolvency Resolution Process (CIRP) against Karan Processors Private Limited by filing CP (IB) No. 339/Chd/Hry/2019 under Section 9 of the Insolvency and Bankruptcy Code, 2016. The CIRP was admitted on 22.01.2020. Mr. Sameer Rastogi was initially appointed as the Interim Resolution Professional (IRP), but was later replaced by Mr. Amarnath as the Resolution Professional (RP) after a Committee of Creditors (CoC) meeting on 20.02.2020. The Adjudicating Authority approved this change on 11.03.2020. Subsequently, IA No. 426/2020 was filed by Mr. Amarnath, the RP, under Section 33(2) of the IBC, seeking an order for the liquidation of Karan Processors Private Limited.

## Facts

Ultratreat Industrial Services initiated CIRP against Karan Processors Pvt. Ltd. under Section 9 of IBC, 2016. The CIRP was admitted on 22.01.2020. Initially, Sameer Rastogi was appointed as IRP, later replaced by Amarnath. Amarnath, as RP, filed IA No. 426/2020 under Section 33(2) of IBC seeking liquidation. The CoC, with 67.63% voting share, resolved for liquidation due to the company's poor condition and financial burden. The CoC determined that the company's machinery was in junk condition, making revival impossible. The RP filed a compliance affidavit showing the condition of the plant and machinery. The application for liquidation was filed within the prescribed period, considering the lockdown period. The CoC resolved to appoint Amarnath as Liquidator with

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## Issues and analysis

### Issue 1: Whether the application for liquidation filed by the Resolution Professional under Section 33(2) of …

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

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

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**Interpretation:** Section 33(2) provides a mechanism for the liquidation of a corporate debtor

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**Application:** In this case, the Resolution Professional filed the application for liquidation

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## Parties

- **Judges:** Ajay Kumar…; RAGHU N…; +1 more
- **Respondents:** Karan Processors…

## Timeline

- **2019-01-01 — CP (IB) No. 339/Chd/Hry/…**: CP (IB) No. 339/Chd/Hry/2019 filed by Ultratreat Industrial Services under Section 9 of…
- **2020-01-22 — CIRP Admi…**: Corporate Insolvency Resolution Process (CIRP) against Karan Processors Private Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52 — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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