# 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-02173. The case involves Servalakshmi Paper Ltd., which was undergoing the Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 31 Jul 2019
- **Citation:** TCN-2019-NCLT-02173
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/servalakashmi-paper-ltd-ma-678-2019-in-cp-514-ib-2017-df5a14ab

## Summary

### Background

The case involves Servalakshmi Paper Ltd., which was undergoing the Corporate Insolvency Resolution (CIR) process. As 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, in its 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. The liquidator then filed an application seeking direction to constitute a Committee of Creditors (CoC) to ascertain their opinion on the schemes filed by two applicants.

## Facts

Servalakshmi Paper Ltd. was undergoing CIR process but no resolution plan was available, leading to a liquidation order on 2018-04-24. An appeal was filed against the liquidation order before the NCLAT. The NCLAT directed consideration of schemes under Section 230 of the Companies Act, 2013. The liquidator filed an application to constitute a CoC to ascertain their opinion on the schemes filed by two applicants. The NCLAT had initially given 90 days for working out the scheme, but this period had expired.

## Issues and analysis

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

**Ratio:** The court has the authority to permit the liquidator to constitute a Committee of

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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 court in liquidation proceedings

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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…**: Servalakshmi Paper Ltd. was ordered…
- **2019-02-27 — NCLAT Or…**: The Hon'ble NCLAT passed an order directing consideration of schemes under Section 230 of…

## 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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