# In the matter of Kushal International Limited CA No. 243,265 & 281-2018 in Company Petition No.(IB)124-ALD-2018

> NCLT judgment dated 2019-02-28. Citation: TCN-2019-NCLT-04655. The case involves Corporate Insolvency Resolution Process (CIRP) initiated against Kushal…

- **Court:** NCLT
- **Order date:** 28 Feb 2019
- **Citation:** TCN-2019-NCLT-04655
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kushal-international-limited-ca-no-243265-281-2018-in-company-petition-noib124-a-3d8071a5

## Summary

### Background

The case involves Corporate Insolvency Resolution Process (CIRP) initiated against Kushal International Ltd. (KIL) by Jammu & Kashmir Bank Ltd. The Adjudicating Authority commenced CIRP on 08.05.2018, appointing an Interim Resolution Professional (IRP). Several applications were filed, including those for liquidation, stay of CIRP, and removal of the RP. The Committee of Creditors (CoC), consisting of only one financial creditor, resolved to liquidate the company due to non-cooperation from the suspended directors in providing necessary financial data and information. The RP filed an application for liquidation, and the suspended directors filed applications seeking stay of CIRP and removal of the RP, alleging bias and inaction. The NCLT considered these

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## Facts

The Jammu & Kashmir Bank Ltd. initiated CIRP against Kushal International Ltd. (KIL) under Section 7 of the I&B Code. The NCLT commenced CIRP on 08.05.2018, appointing an IRP. The IRP took possession of the Corporate Debtor's assets and sought information from the suspended directors, statutory auditor, and other parties. The suspended directors allegedly did not fully cooperate in providing the required information. The CoC, consisting of only one financial creditor (J&K Bank), resolved to liquidate the company due to the lack of a resolution plan and non-cooperation from the directors. The RP filed an application for liquidation, while the suspended directors filed applications seeking stay of CIRP and removal of the RP, alleging bias and inaction. The

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## Issues and analysis

### Issue 1: Whether the application for liquidation under …

**Ratio:** Section 33(2) of the IBC enables the RP to seek liquidation of the Corporate Debtor in

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**Reasoning:** The CoC, with 100% voting share, resolved to liquidate the company due to the lack of a

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**Interpretation:** Section 33(2) of the IBC allows for liquidation if the CoC, by a requisite

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**Application:** In this case, the CoC, consisting of the sole financial creditor (J&K

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Saroj Ra…
- **Appellants:** The Jammu and…
- **Respondents:** Kushal Internation…

## Timeline

- **2018-05-08 — CIRP Commen…**: NCLT appointed Interim Resolution…
- **2018-05-10 — Public Annou…**: Public announcement made in Amar Ujala (Hindi) and The Statesman (English) with a…

## 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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