# In the matter of KMG A To Z Systems Private Limited C.A. 1394-2020 In Company Petition No. (IB) – 1644 (PB) -2018

> NCLT judgment dated 2021-05-13. Citation: TCN-2021-NCLT-02154. The case involves an application filed by the Resolution Professional (RP) under Section 33(2)…

- **Court:** NCLT
- **Order date:** 13 May 2021
- **Citation:** TCN-2021-NCLT-02154
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kmg-a-to-z-systems-private-limited-ca-1394-2020-in-company-petition-no-ib-1644-p-45307fa6

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the Corporate Debtor, KMG ATOZ Systems Private Limited. The Financial Creditor, Oriental Bank of Commerce, had previously filed an application under Section 7 of the Code for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. This application was admitted by the Tribunal on 06.08.2019, initiating CIRP, and Mr. Sandeep Kumar Bhatt was appointed as the Interim Resolution Professional (IRP).

## Facts

Oriental Bank of Commerce, a Financial Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against KMG ATOZ System Private Limited, the Corporate Debtor, by filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application was admitted on 06.08.2019, and Mr. Sandeep Kumar Bhatt was appointed as the Interim Resolution Professional (IRP). The Promoter-Directors of the Corporate Debtor proposed a resolution plan with a value of Rs. 12.75 Crores, while the liquidation value was estimated at Rs. 9 Crores. The Corporate Debtor also had a pending arbitration claim of Rs. 280 Crores. The Committee of Creditors (CoC), consisting of Punjab National Bank (80% voting share) and Canara Bank (15% voting share), decided to proceed with

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## Issues and analysis

### Issue 1: Whether the Tribunal should interfere with the decision of the Committee of Creditors (CoC) to …

**Ratio:** The CoC has the right to take commercial decisions in the interest of the creditors, and

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**Reasoning:** The Tribunal reasoned that the Promoter-Directors' counsel had not demonstrated any

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**Interpretation:** This legal issue concerns the extent to which the adjudicating authority can

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**Application:** In this specific case, the Tribunal applied the principle by refusing to

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## Parties

- **Judges:** SHRI. B.S.V…; SHRI. HEMANT…
- **Respondents:** KMG ATOZ System…; Ashok J…

## Timeline

- **2018-01-01 — Filing of Section 7…**: Oriental Bank of Commerce filed an application under Section 7 of the Insolvency and…
- **2019-08-06 — Admission of Ap…**: The Tribunal admitted the application filed by Oriental Bank of Commerce, initiating CIRP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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