# In the matter of Khushi Foods Ltd. IA 468-2019 in C.P. (IB) No.204-NCLT-AHM-2017

> NCLT judgment dated 2019-10-09. Citation: TCN-2019-NCLT-01068. The case involves an application filed by the Resolution Professional (RP) seeking an order of…

- **Court:** NCLT
- **Order date:** 9 Oct 2019
- **Citation:** TCN-2019-NCLT-01068
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/khushi-foods-ltd-ia-468-2019-in-cp-ib-no204-nclt-ahm-2017-a81630c1

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) seeking an order of liquidation for the Corporate Debtor, Khushi Foods Ltd, under Section 33(1) of the Insolvency and Bankruptcy Code (IB Code). The Corporate Insolvency Resolution Process (CIRP) was initiated based on a petition admitted on 02.11.2018 under Section 9 of the IB Code. Initially, Mr. Ashok Pranshankar was appointed as the Interim Resolution Professional (IRP).

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Khushi Foods Ltd. based on a petition admitted on 02.11.2018 under Section 9 of the Insolvency and Bankruptcy Code (IB Code). Mr. Ashok Pranshankar was initially appointed as the Interim Resolution Professional (IRP). The IRP made a public announcement inviting claims from creditors and constituted a Committee of Creditors (CoC) on 19.12.2018. Claims were received from Union Bank of India and Deutsche Bank AG. The CoC, in its first meeting on 26.12.2018, proposed to replace the IRP, and Mr. Chandra Prakash Jain was appointed as the RP. The CoC also appointed M/s Patel and Jesalpur, Chartered Accountants, and two registered valuers. The RP informed the CoC about significant losses and suggested a

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## Issues and analysis

### Issue 1: Whether the application for liquidation under Section 33(1) of the Insolvency and Bankruptcy Code …

**Ratio:** The commercial wisdom of the Committee of Creditors (CoC) is paramount in deciding

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**Reasoning:** The Tribunal recognized that the CoC, after considering the circumstances and the absence

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**Interpretation:** Section 33(1) of the IB Code allows for liquidation when a resolution plan is

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**Application:** The CoC's decision to liquidate the Corporate Debtor, Khushi Foods Ltd., was

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Chandra Prakash…
- **Respondents:** Khushi Food…

## Timeline

- **2017-01-01 — CP (IB) No.204/NCLT/AHM/…**: The original Corporate…
- **2018-11-02 — Admission of…**: Petition bearing No. CP (IB) 204/2017 was…

## 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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