# In the matter of Mandhana Industries Ltd. MA 692 & 811-20108 in CP(IB)1399(MB)-2017

> NCLT judgment dated 2018-11-30. Citation: TCN-2018-NCLT-00256. The case involves the approval of a resolution plan for Formation Textiles LLC under the…

- **Court:** NCLT
- **Order date:** 30 Nov 2018
- **Citation:** TCN-2018-NCLT-00256
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mandhana-industries-ltd-ma-692-811-20108-in-cpib1399mb-2017-ab8a5907

## Summary

### Background

The case involves the approval of a resolution plan for Formation Textiles LLC under the Insolvency and Bankruptcy Code, 2016 (IBC). A company petition under Section 7 of the IBC was admitted on 29.9.2017 against Mandhana Industries Ltd., the Corporate Debtor. Charu Desai was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. An extension of 90 days was sought for the Corporate Insolvency Resolution Process (CIRP), which was granted on 23.3.2018. The resolution plan was approved by the Committee of Creditors (CoC) with 80.92% voting share. Axis Bank, a dissenting financial creditor, filed MA 811/2018 seeking liquidation value.

## Facts

A company petition under Section 7 of the IBC was admitted against Mandhana Industries Ltd. on 2017-09-29. Charu Desai was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. The 180-day time period was expiring on 2018-03-27, leading to an application for a 90-day extension, which was granted on 2018-03-23. The total amount of claims admitted in the CIRP was Rs. 1,183.17 crores. Initially, the CoC consisted of 15 financial creditors, later revised to 16. The liquidation value of the company was determined to be Rs. 305 crores. Three resolution plans were received, with Finquest Financial Services Limited initially declared the highest bidder. Formation Textiles LLC challenged this, leading to an outbidding process where

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## Issues and analysis

### Issue 1: Whether the resolution plan meets the criteria laid down in Section 30(2) of the IBC and …

**Ratio:** Section 30(2) of the IBC and regulations 38 and 39 of the IBBI Regulations prescribe the

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**Reasoning:** The court examined the resolution plan to determine whether it complied with the

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**Interpretation:** Section 30(2) and regulations 38 and 39 are interpreted to ensure that the

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**Application:** The court found that the resolution plan, with certain modifications, was in

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## Parties

- **Judges:** V. P. S…; Ravikumar…; +1 more
- **Appellants:** Charu D…
- **Respondents:** Mandhana Industrie…; Formation…

## Timeline

- **2017-09-29 — Admission of Company…**: A company petition under Section 7 of the IBC was admitted against Mandhana Industries…
- **2018-03-23 — Extension o…**: An extension of 90 days was granted for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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