# In the matter of Saru Agro Foods Ltd. IA 2343 of 2020 in CP 415 of 2019

> NCLT judgment dated 2021-08-03. Citation: TCN-2021-NCLT-01488. The case involves an application submitted by the liquidator seeking an order for the…

- **Court:** NCLT
- **Order date:** 3 Aug 2021
- **Citation:** TCN-2021-NCLT-01488
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/saru-agro-foods-ltd-ia-2343-of-2020-in-cp-415-of-2019-01ae1f36

## Summary

### Background

The case involves an application submitted by the liquidator seeking an order for the dissolution of the Corporate Debtor, Saru Agro Foods Ltd., under Section 54 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016. The Corporate Debtor was admitted into CIRP based on a petition filed by Om Traders, an operational creditor. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared. However, the directors of the Corporate Debtor were uncooperative, and the company had no assets, employees, or traceable promoters. The CoC recommended direct dissolution due to the lack of assets and business activity.

## Facts

Om Traders, an operational creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Saru Agro Foods Ltd. The petition was admitted on 2019-11-14. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared. A public announcement was made to invite claims from stakeholders. Only one claim was received from a financial creditor, M/s. Loyal Enterprises, for Rs. 21,60,000, of which Rs. 20,00,000 was admitted provisionally. The directors of Saru Agro Foods Ltd. were uncooperative, and the company had no assets, employees, or traceable promoters. The company operated from a rented premise and had no business activity. The Committee of Creditors (CoC) was aware that the Corporate Debtor was non-operational. The CoC recommended

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## Issues and analysis

### Issue 1: Whether the application for dissolution of the Corporate Debtor under Section 54 of the Insolvency …

**Ratio:** Section 54 of the IBC allows for the dissolution of a corporate debtor when its assets

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**Reasoning:** The court reasoned that the Corporate Debtor had no assets, the directors were

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**Interpretation:** Section 54 and Regulation 14 are interpreted to allow for the dissolution of a

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**Application:** The ratio and reasoning were applied to the specific facts of the case,

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Dilipkumar…
- **Respondents:** Saru Agro Foods…
- **Advocates:** Durgaprasad…

## Timeline

- **2019-11-14 — Admission of…**: Order passed admitting the Petition u/s 9 of I&B Code by appointing an Interim Resolution…
- **2020-02-18 — Public Annou…**: Applicant made public announcement which was published on 2020-02-19 for calling upon the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 54 — Dissolution of corporate debtor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-54)

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