# In the matter of Lakshmi Cotysn Limited CA o. 55-2019 in CP(IB) No. 142-ALD-2018

> NCLT judgment dated 2020-07-01. Citation: TCN-2020-NCLT-01089. The case involves an application filed under Section 33(1)(a) read with 33(2) of the Insolvency…

- **Court:** NCLT
- **Order date:** 1 Jul 2020
- **Citation:** TCN-2020-NCLT-01089
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lakshmi-cotysn-limited-ca-o-55-2019-in-cpib-no-142-ald-2018-49d1d5cd

## Summary

### Background

The case involves an application filed under Section 33(1)(a) read with 33(2) of the Insolvency and Bankruptcy Code (IBC) by the Resolution Professional (RP) seeking an order for the liquidation of the Corporate Debtor, Shri Lakshmi Cotsyn Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated based on a petition filed by the Financial Creditor, Union Bank of India, under Section 7 of the IBC. The Adjudicating Authority had previously admitted the petition on 30.05.2018 and appointed Mr. Rohit Sehgal as the Interim Resolution Professional (IRP), who was later confirmed as the RP. An application for the extension of the CIRP period by 90 days was admitted on 26.11.2018. Despite efforts, no resolution plan was received, leading to the application for

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## Facts

Union Bank of India initiated CIRP against Lakshmi Cotsyn Limited under Section 7 of IBC, which was admitted on 30.05.2018. Rohit Sehgal was appointed as IRP and later confirmed as RP. An extension of 90 days for CIRP was granted on 26.11.2018. Despite efforts, no resolution plan was received. The RP filed an application under Section 33(1)(a) for liquidation. The suspended management argued that their resolution proposal of Rs. 650 Crores was rejected without proper reasoning, while the liquidation value was Rs. 500 Crores. The CoC rejected multiple settlement proposals, including one for Rs. 650 Crores. The CoC imposed conditions for considering an OTS proposal, which the suspended management allegedly did not respond to. The suspended management changed investors

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## Issues and analysis

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

**Ratio:** Section 33(1)(a) of the IBC allows for the initiation of liquidation proceedings when no

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**Reasoning:** The court reasoned that despite the efforts of the RP and the extension of the CIRP

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**Interpretation:** Section 33(1)(a) is interpreted to mean that if the CIRP fails to produce a

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**Application:** Since no resolution plan was received, and the CoC favored liquidation, the

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## Parties

- **Judges:** Rajesh Daya…
- **Respondents:** Lakshmi Cotsyn…; Union Bank of…

## Timeline

- **2018-05-30 — CIRP Init…**: The Adjudicating Authority admitted the petition filed by the Financial Creditor under…
- **2018-11-26 — CIRP Exte…**: An application for the extension of the…

## 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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