# In the matter of Lotus Auto Engineering Ltd. & Ors. IB-31(PB)-2018

> NCLT judgment dated 2020-12-15. Citation: TCN-2020-NCLT-00074. The case involves an application for extension of time to sell a company as a going concern…

- **Court:** NCLT
- **Order date:** 15 Dec 2020
- **Citation:** TCN-2020-NCLT-00074
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lotus-auto-engineering-ltd-ors-ib-31pb-2018-a54f0171

## Summary

### Background

The case involves an application for extension of time to sell a company as a going concern during liquidation. The Resolution Professional (RP) failed to get approval for a resolution plan during the Corporate Insolvency Resolution Process (CIRP). Several Expressions of Interest were received, and two resolution plans were presented to the Committee of Creditors (CoC), but the CoC rejected them. The value of the resolution plans was around ₹100 Crore, while the reserve price for selling the Corporate Debtor as a going concern is only around ₹40 Crore.

## Facts

The Oriental Bank of Commerce initiated CIRP against Lotus Auto Engineering Ltd. During the CIRP, two resolution plans were presented to the CoC, but they were rejected. The value of these plans was approximately ₹100 Crore each. After the CIRP failed, the company went into liquidation. The reserve price for selling the Corporate Debtor as a going concern during liquidation was set at ₹40 Crore. The value of 20 acres of land belonging to the corporate debtor was valued at ₹50 Crore during CIRP, and the plant and machinery were also valued at ₹50 Crore. The liquidator sought an extension of 90 days to complete the liquidation period, citing the need to sell the company as a going concern. The court noted a significant discrepancy between the asset's value during CIRP

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## Issues and analysis

### Issue 1: Whether the extension of time for the …

**Ratio:** The court has the power to grant extensions for the liquidation period to facilitate the

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**Reasoning:** The liquidator requested an extension of 90 days to complete the liquidation period for

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**Interpretation:** The court interprets the provisions related to the liquidation period to allow

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**Application:** The court granted the extension of 90 days, effective from 2020-12-10, to allow

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## Parties

- **Judges:** B.S.V. Prakash…; HEMANT KUMAR…
- **Appellants:** Oriental Bank of…
- **Respondents:** Lotus Auto…

## Timeline

- **N/A — CIRP Init…**: CIRP initiated against Lotus Auto…
- **N/A — Resolution Plans…**: Two resolution plans, valued at approximately…

## 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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