# In the matter of Prabhat Resources Limited IA-1124(CHE)-2020 in IBA-546-2019

> NCLT judgment dated 2021-02-23. Citation: TCN-2021-NCLT-02945. The Adjudicating Authority initiated CIRP against the Corporate Debtor, M/s. Prabhat Resources…

- **Court:** NCLT
- **Order date:** 23 Feb 2021
- **Citation:** TCN-2021-NCLT-02945
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prabhat-resources-limited-ia-1124che-2020-in-iba-546-2019-099e6a78

## Summary

### Background

The Adjudicating Authority initiated CIRP against the Corporate Debtor, M/s. Prabhat Resources Limited, on 06.09.2019. The applicant was appointed as the IRP. A public announcement was made on 19.11.2019, but no Expression of Interest (EOI) was received until 27.12.2019. The Resolution Professional appointed 2 IBBI Registered Valuers on 11.02.2020 for asset valuation. The 7th CoC meeting on 02.03.2020 resolved to seek an extension of the CIRP for 90 days from 05.03.2020. The Tribunal allowed the extension on 09.07.2020. In the 11th CoC meeting on 05.12.2020, members unanimously resolved to liquidate the Corporate Debtor, directing the applicant to approach the Tribunal for liquidation.

## Facts

The Adjudicating Authority initiated CIRP against M/s. Prabhat Resources Limited on 06.09.2019. Mr. Velayutham Jayavel was appointed as the Resolution Professional. Despite a public announcement on 19.11.2019, no Expression of Interest (EOI) was received by 27.12.2019. Two IBBI Registered Valuers were appointed on 11.02.2020. The fair value of the Corporate Debtor was assessed at Rs.3,37,50,000/-, and the liquidation value at Rs.82,65,000. The CoC resolved to seek an extension of the CIRP, which was granted until 05.03.2020. Subsequently, the CoC unanimously resolved to liquidate the Corporate Debtor on 05.12.2020. The Resolution Professional expressed unwillingness to act as liquidator. Mr. Ramachandran Subramanian was suggested and gave written consent to act as

…

## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor, M/s. Prabhat Resources Limited, …

**Ratio:** Section 33(2) of the IBC, 2016 allows for the initiation of liquidation proceedings when

…

**Reasoning:** The CoC unanimously resolved to liquidate the Corporate Debtor in its 11th meeting held

…

**Interpretation:** Section 33(2) provides the legal basis for initiating liquidation when the CoC

…

**Application:** Given the CoC's resolution and the application by the Resolution Professional,

…

## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** Velayutham…
- **Respondents:** Prabhat Resources…

## Timeline

- **2019-09-06 — CIRP Init…**: Adjudicating Authority initiated CIRP…
- **2019-11-19 — Public Annou…**: Public announcement calling for…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/prabhat-resources-limited-ia-1124che-2020-in-iba-546-2019-099e6a78