# In the matter of Sembmarine Kakinada Limited I.A. No 90 of 2021 in TCP (IB) No. 28-7-AMR-2019 in CP (IB) No. 18-7-HDB-2018

> NCLT judgment dated 2021-11-01. Citation: TCN-2021-NCLT-00632. The case involves the Corporate Insolvency Resolution Process (CIRP) of Sembmarine Kakinada…

- **Court:** NCLT
- **Order date:** 1 Nov 2021
- **Citation:** TCN-2021-NCLT-00632
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sembmarine-kakinada-limited-ia-no-90-of-2021-in-tcp-ib-no-28-7-amr-2019-in-cp-ib-1001bed0

## Summary

### Background

The case involves the Corporate Insolvency Resolution Process (CIRP) of Sembmarine Kakinada Limited. Axis Bank Limited, the Financial Creditor, initiated the process due to defaults in repayment. The Tribunal admitted the petition on 2019-09-23 and appointed an Insolvency Resolution Professional (IRP). The IRP constituted a Committee of Creditors (CoC) and convened multiple meetings. The CIRP faced challenges including non-cooperation from the suspended Board of Directors, issues with Kakinada Sea Ports Limited (KSPL) regarding lease agreements, and the impact of the COVID-19 lockdown. Despite multiple extensions and attempts to find a resolution plan, none were viable. The CoC ultimately voted for liquidation.

## Facts

Axis Bank Limited, as a Financial Creditor, initiated a company petition against Sembmarine Kakinada Limited (Corporate Debtor) due to defaults in repayment. The petition was admitted on 2019-09-23, and an IRP was appointed. The IRP formed a CoC and convened 23 meetings. Kakinada Sea Ports Limited (KSPL), the erstwhile promoter and lessor, created issues by claiming termination of sublease agreements despite the moratorium. The RP filed I.A.No.17/2020 to restrain KSPL. The RP faced non-cooperation from the directors, hindering the finalization of accounts. Multiple attempts to invite resolution plans failed, with no viable plans submitted. The CIRP period was extended multiple times, impacted by the COVID-19 lockdown. Ultimately, the CoC voted 100% in favor of

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Sembmarine Kakinada Limited, should be liquidated due to the failure …

**Ratio:** Section 33(1) of the IBC mandates the initiation of liquidation if no resolution plan is

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**Reasoning:** The CIRP process was initiated, and multiple attempts were made to find a resolution

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**Interpretation:** The Supreme Court has emphasized the importance of adhering to strict timelines

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**Application:** In this case, the CIRP period was extended multiple times, but no viable

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Axis Ban…
- **Respondents:** Sembmarine…

## Timeline

- **2019-09-23 — Admission of Company…**: The Tribunal admitted the company petition filed by Axis Bank against Sembmarine Kakinada…
- **2019-10-09 — Public Annou…**: A public announcement was made…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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