# 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-01358. The case involves an application regarding the Corporate Insolvency Resolution Process (CIRP)…

- **Court:** NCLT
- **Order date:** 12 Aug 2021
- **Citation:** TCN-2021-NCLT-01358
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mpl-motors-pvt-ltd-ia-673che-2021-in-iba-901-2019-d3f45538

## 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 appointed. The Committee of Creditors (CoC) has only one financial creditor. The RP has not appointed two registered valuers to determine the fair value and liquidation value of the Corporate Debtor, as mandated by Regulation 27 of the IBBI Regulations, 2016. The CoC passed a resolution for liquidation without exploring the possibility of insolvency resolution and without the RP finalizing the books of accounts or ascertaining the assets and liabilities of the Corporate Debtor.

## 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 Committee of Creditors (CoC) consists of only one financial creditor. The RP did not appoint two registered valuers within the stipulated timeframe to determine the fair value and liquidation value of the Corporate Debtor, as required by Regulation 27 of the IBBI Regulations, 2016. The books of accounts of the Corporate Debtor are incomplete. The RP informed the CoC that no resolution plan was submitted, even without issuing an Expression of Interest. The CoC passed a resolution for liquidation without the RP finalizing the books of accounts or ascertaining the assets and liabilities of the

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) complied with the mandatory requirements of the IBBI …

**Ratio:** Regulation 27 of the IBBI (Insolvency Resolution Process for Corporate Persons)

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**Reasoning:** The court observed that the RP failed to appoint two registered valuers within the

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**Interpretation:** The regulation is interpreted as a mandatory requirement to ensure a fair and

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**Application:** In this case, the RP's failure to comply with Regulation 27 meant that the CoC

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## Parties

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

## Timeline

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

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