# In the matter of Servalakashmi Paper Ltd. MA-678-2019 in CP-514-IB-2017

> NCLT judgment dated 2019-07-31. Citation: TCN-2019-NCLT-02196. The case involves Servalakshmi Paper Ltd., which was undergoing the Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 31 Jul 2019
- **Citation:** TCN-2019-NCLT-02196
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/servalakashmi-paper-ltd-ma-678-2019-in-cp-514-ib-2017-b969c84a

## Summary

### Background

The case involves Servalakshmi Paper Ltd., which was undergoing the Corporate Insolvency Resolution (CIR) process. Since no resolution plan was available, the company was ordered to be liquidated on 2018-04-24. An appeal was filed against the liquidation order before the NCLAT. The NCLAT order dated 2019-02-27 directed under Para 18 for approval of the scheme, if any, filed under Section 230 of the Companies Act, 2013, which could be beneficial for revival of the Corporate Debtor / Company under Liquidation.

## Facts

Servalakshmi Paper Ltd. was undergoing CIR process but had no resolution plan available, leading to a liquidation order on 2018-04-24. An appeal was filed, and the NCLAT directed consideration of schemes under Section 230 of the Companies Act, 2013. The Liquidator then applied to constitute a CoC to assess the schemes. The NCLAT had given 90 days for working out the Scheme under Section 230 of the Companies Act, 2013, which has already been expired. The Liquidator sought permission to form a CoC to evaluate these schemes.

## Issues and analysis

### Issue 1: Whether the Liquidator should be permitted to constitute a Committee of Creditors to consider the …

**Ratio:** The court has the power to grant permission to the Liquidator to constitute a Committee

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**Reasoning:** The court reasoned that it was appropriate to grant permission to the Liquidator to

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**Interpretation:** This involves interpreting the powers of the NCLT in relation to the directions

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

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## Parties

- **Judges:** Ch. Mohd Sharief…; SHRI. ANIL…
- **Appellants:** S DHANAPAL…
- **Respondents:** SERVALAKSHMI…

## Timeline

- **2018-04-24 — Liquidation…**: The Company was ordered to be…
- **2019-02-27 — NCLAT Or…**: The Hon'ble NCLAT passed an order in the Company Appeal (AT) (Insolvency) No.224/2018…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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