# In the matter of Mohan Gems & Jewels Pvt. Ltd. I.A. 1490-2020 in Company Petition No. (IB)-590 (PB)-2018

> NCLT judgment dated 2020-09-16. Citation: TCN-2020-NCLT-00607. The liquidator filed an application seeking closure of the liquidation process under Regulation…

- **Court:** NCLT
- **Order date:** 16 Sept 2020
- **Citation:** TCN-2020-NCLT-00607
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mohan-gems-jewels-pvt-ltd-ia-1490-2020-in-company-petition-no-ib-590-pb-2018-58a9b0e4

## Summary

### Background

The liquidator filed an application seeking closure of the liquidation process under Regulation 45(3)(a) of the IBBI Liquidation Process Regulations, 2016. The corporate debtor was sold as a going concern in an e-auction held on 20.11.2019, with Mr. Vijay Verma declared the highest bidder at Rs.4,51,99,713. The corporate debtor, a jewellery shop, was sold during liquidation after no expression of interest was received following an Invitation of Interest. The liquidator sought closure to allow the highest bidder, along with another, to become directors, reduce paid-up capital to Rs.4.50 Crores, and treat Rs.1,99,737 as an unsecured loan. The redrawn share capital, reserves, and share premium were to comply with the Companies Act.

## Facts

The Liquidator filed an application seeking closure of the Liquidation Process as per Regulation 45(3) (a) of IBBI Liquidation Process Regulations, 2016. The Corporate Debtor, a jewellery shop, was sold as a going concern in an E-auction held on 20.11.2019, with Mr. Vijay Verma declared the highest bidder at a bid price of Rs.4,51,99,713. After admission of the case, no expression of interest was received following an Invitation of Interest published by the RP. The RP, at the instance of the CoC, obtained a liquidation order from the Bench. During liquidation, an E-Auction notice was published to sell the corporate Debtor as a going concern. The liquidator sought closure of the liquidation process so that the highest bidder, along with another, will become directors,

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## Issues and analysis

### Issue 1: Whether the liquidator's request for closure of the liquidation process, skipping dissolution, can …

**Ratio:** Section 54 of the IBC mandates the dissolution of the corporate debtor after the

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**Reasoning:** The court reasoned that the IBC explicitly requires dissolution after liquidation.

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**Interpretation:** The court interpreted Section 54 as a mandatory requirement, emphasizing that

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**Application:** The court applied this ratio to the facts by stating that because the assets of

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## Parties

- **Judges:** SH. B.S.V.…; Sh. Hemant Kumar…
- **Appellants:** INVEST ASSET…
- **Respondents:** M/s. MOHAN GEMS &…

## Timeline

- **2018-01-01 — Company Petiti…**: Company Petition No.…
- **2019-11-20 — E-Auction…**: E-auction held where the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 54 — Dissolution of corporate debtor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-54)

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