# In the matter of My Choice Knit and Apparels Pvt. Ltd.I.A. No. 168-2020 in C.P. (IB)No. 136-BB-2018

> NCLT judgment dated 2020-05-26. Citation: TCN-2020-NCLT-01322. The case involves an application (I.A.No.168/2020) filed in C.P.(IB)No.136/BB/2018 by the…

- **Court:** NCLT
- **Order date:** 26 May 2020
- **Citation:** TCN-2020-NCLT-01322
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/my-choice-knit-and-apparels-pvt-ltdia-no-168-2020-in-cp-ibno-136-bb-2018-9a428ae8

## Summary

### Background

The case involves an application (I.A.No.168/2020) filed in C.P.(IB)No.136/BB/2018 by the Resolution Professional, Ramanahalli S. Doddabyregowda, seeking to dissolve the Corporate Debtor, M/s. My Choice Knit & Apparels Pvt. Ltd., as a special case. The company was no longer a going concern, with no employees and operations shut down since March 2019. The initial Corporate Insolvency Resolution Process (CIRP) was initiated by M/s. Bannari Amman Spinning Mills Ltd. (Operational Creditor) under Section 9 of the IBC, 2016, due to a default of Rs.1,07,27,295/-. The Adjudicating Authority initially dismissed the case on 04.04.2019, but the order was set aside by NCLAT on 03.09.2019, directing the Adjudicating Authority to admit the case if no settlement was reached. CIRP

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## Facts

M/s. Bannari Amman Spinning Mills Ltd. initiated CIRP against M/s. My Choice Knit & Apparels Pvt. Ltd. due to a default of Rs.1,07,27,295. The Adjudicating Authority initially dismissed the case, but NCLAT overturned this decision. CIRP was initiated, and Ramanahalli S. Doddabyregowda was appointed as IRP and later confirmed as RP. The company had ceased operations since March 2019, with no employees and assets sold to clear bank debt. No resolution plan was received. The Committee of Creditors (CoC) decided to dissolve the Corporate Debtor. The total outstanding amount payable to creditors was Rs.8,17,19,714.00, with the IRP/RP receiving claims amounting to Rs.4,31,14,104.00. The realizable assets value was Rs.8,00,234.00, against which the Resolution Professional

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, M/s. My Choice Knit & Apparels Pvt. Ltd., should be dissolved …

**Ratio:** Section 54 of the IBC, 2016, and Rule 14 of the IBBI (Liquidation Process) Regulations,

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**Reasoning:** The Adjudicating Authority considered that the assets of the Corporate Debtor had been

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**Interpretation:** Section 54 and Rule 14 provide a mechanism for early dissolution when the

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**Application:** Given that the assets had been realized and distributed, and the CoC had

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Respondents:** M/s. My Choice…

## Timeline

- **2018-01-01 — Initiation…**: C.P.(IB)No.136/BB/2018 was filed by M/s. Bannari Amman Spinning Mills Ltd. under Section…
- **2019-04-04 — Initial Dis…**: The Adjudicating Authority…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52 — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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