# In the matter of Powercon Projects & Association Limited CP(IB) No. 389-KB-2018

> NCLT judgment dated 2019-01-08. Citation: TCN-2019-NCLT-05294. The case involves an application for the initiation of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 8 Jan 2019
- **Citation:** TCN-2019-NCLT-05294
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/powercon-projects-association-limited-cpib-no-389-kb-2018-2698027b

## Summary

### Background

The case involves an application for the initiation of the Corporate Insolvency Resolution Process (CIRP) under Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016. CG Power and Industrial Solutions Limited, formerly Crompton Greaves Limited, filed the application. The Interim Resolution Professional (IRP) was appointed, but the Committee of Creditors (CoC), consisting solely of the State Bank of India (SBI), did not confirm the IRP's appointment. The IRP's claim was rejected, and the CoC expressed its intention not to bear the expenses. The CIRP period of 180 days expired without any resolution plan. A winding-up petition was pending before the High Court at Orissa.

## Facts

CG Power and Industrial Solutions Limited filed an application for initiating CIRP against Powercon Projects & Association Limited. The application was admitted, and an Interim Resolution Professional (IRP), Mr. Anand Chandra Swain, was appointed. The Committee of Creditors (CoC) consisted of only one member, the State Bank of India (SBI). The CoC did not confirm the appointment of the IRP. The IRP rejected the claim of Concept Management Consulting Limited for want of proof. The CoC did not wish to spend any expenses incurred by the IRP and was reluctant to approve the resolution cost and fees. The IRP filed a final progress report recommending liquidation. The Corporate Debtor had stopped its operation and was not doing any business for the last 4/5 years. The

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) was justified in not confirming the appointment of the …

**Ratio:** The Insolvency and Bankruptcy Code (IBC) provides for the appointment of an IRP and

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**Reasoning:** The court found that the CoC, consisting solely of SBI, did not confirm the IRP's

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**Interpretation:** The CoC's failure to confirm the IRP's appointment and its reluctance to

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**Application:** In this case, the CoC's actions led to the failure of the CIRP process and

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## Parties

- **Judges:** Jinan…
- **Appellants:** CG Power and…
- **Respondents:** Powercon Projects…

## Timeline

- **2018-01-04 — Hearing…**: The CP was finally…
- **2018-07-10 — Application A…**: Application was admitted and Mr. Anand Chandra Swain was appointed as Interim Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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