# In the matter of Quantum Coal Energy Pvt. Ltd. MA-1404-2019 in IBA-308-2019

> NCLT judgment dated 2020-03-09. Citation: TCN-2020-NCLT-01617. The case involves an appeal preferred by the Corporate Debtor against an order passed by the…

- **Court:** NCLT
- **Order date:** 9 Mar 2020
- **Citation:** TCN-2020-NCLT-01617
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/quantum-coal-energy-pvt-ltd-ma-1404-2019-in-iba-308-2019-5cb46bd2

## Summary

### Background

The case involves an appeal preferred by the Corporate Debtor against an order passed by the National Company Law Tribunal (NCLT) liquidating the Corporate Debtor. The National Company Law Appellate Tribunal (NCLAT) directed that the Resolution Professional/Liquidator not proceed with the liquidation process during the pendency of the appeal. The Applicant/Liquidator brought to the notice of the NCLT the order passed by the NCLAT.

## Facts

The National Company Law Tribunal (NCLT) had previously ordered the liquidation of Quantum Coal Energy Pvt Ltd (Corporate Debtor) on 17.09.2019. The Corporate Debtor, through its CEO, filed an appeal against this order. The National Company Law Appellate Tribunal (NCLAT) in C.A. (AT) (Insolvency) No. 1207 of 2019, dated 06.12.2019, directed that the liquidation process be stayed during the pendency of the appeal. The NCLAT, exercising its inherent powers under Rule 11 of the NCLAT Rules, 2016, set aside the liquidation order and the CIRP proceedings. The NCLAT also directed that the Corporate Debtor be released from the rigour of law and allowed to function independently through its Board of Directors. The Liquidator was directed to hand back the records and management

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## Issues and analysis

### Issue 1: Whether the liquidation order passed by the NCLT …

**Ratio:** The NCLAT has the power to set aside liquidation orders to revive the Corporate Debtor,

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**Reasoning:** The NCLAT, considering the object of the IBC to revive the Corporate Debtor, exercised

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**Interpretation:** The NCLAT's interpretation of the IBC prioritizes resolution and revival of the

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**Application:** The NCLAT's order setting aside the liquidation order directly applies to the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** GOPALASAMY GANESH…
- **Respondents:** QUANTUM COAL…; PADMANATHAN…
- **Advocates:** A.M. Srid…; B. Udhaya…

## Timeline

- **2019-09-17 — Liquidation Order by…**: The NCLT ordered the liquidation of the…
- **2019-12-06 — NCLAT Order Staying…**: The NCLAT directed that the liquidation process be stayed during the pendency of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66(1) — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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