# In the matter of MPL Motors Pvt. Ltd. IA-673(CHE)-2021 in IBA-901-2019

> NCLT judgment dated 2021-08-12. Citation: TCN-2021-NCLT-01361. The case involves an application regarding the Corporate Insolvency Resolution Process (CIRP)…

- **Court:** NCLT
- **Order date:** 12 Aug 2021
- **Citation:** TCN-2021-NCLT-01361
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mpl-motors-pvt-ltd-ia-673che-2021-in-iba-901-2019-aa7d3b5e

## Summary

### Background

The case involves an application regarding the Corporate Insolvency Resolution Process (CIRP) of MPL Motors Pvt Ltd. The CIRP was initiated on 2020-11-20. The Resolution Professional (RP) was A. Mohankumar. The Committee of Creditors (CoC) approved a resolution for liquidation of the Corporate Debtor, stating that no resolution plan was received and the company was not viable. The Tribunal observed that the RP had not taken necessary steps, such as appointing valuers or verifying the books of accounts, before the CoC decided on liquidation.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against MPL Motors Pvt Ltd on 2020-11-20. A. Mohankumar was appointed as the Resolution Professional (RP). The first meeting of the Committee of Creditors (CoC) was held on 2020-12-26. The RP informed the CoC that no resolution plan had been submitted. The CoC then passed a resolution for the liquidation of MPL Motors Private Limited. The Tribunal noted that the RP had not issued an Expression of Interest or appointed registered valuers. The Tribunal also noted that the RP had not verified the books of accounts of the Corporate Debtor. The sole Financial Creditor passed a resolution for liquidation on the grounds that the Corporate Debtor was not viable and that spending money on insolvency resolution was

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) can pass a resolution for liquidation without proper …

**Ratio:** Insolvency resolution of the Corporate Debtor is the primary object of IBC, and

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**Reasoning:** The Tribunal found it improper for the CoC to pass a resolution for liquidation without

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**Interpretation:** The IBC prioritizes resolution over liquidation. The CoC must explore all

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**Application:** In this case, the CoC passed a resolution for liquidation without proper

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** A Mohankumar (RP)…
- **Respondents:** MPL Motors…

## Timeline

- **2020-11-20 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2020-12-02 — Public Annou…**: Public announcement was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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