# In the matter of Sham Udyog Limited CA No. 311-2018 In CP (IB) No. 73-Chd-Pb-2017

> NCLT judgment dated 2018-08-20. Citation: TCN-2018-NCLT-00926. The petition was filed by Singhania International Limited against Sham Udyog Limited under…

- **Court:** NCLT
- **Order date:** 20 Aug 2018
- **Citation:** TCN-2018-NCLT-00926
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sham-udyog-limited-ca-no-311-2018-in-cp-ib-no-73-chd-pb-2017-9334f597

## Summary

### Background

The petition was filed by Singhania International Limited against Sham Udyog Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016. The corporate insolvency resolution process (CIRP) was initiated, and an Interim Resolution Professional (IRP) was appointed, later confirmed as the Resolution Professional (RP). The RP made a public announcement and took possession of the corporate debtor's assets. Due to the inability to complete the CIRP within the prescribed period, an application was filed to extend the period. Forensic audit revealed fraudulent and preferential transactions. Ultimately, the Committee of Creditors (CoC) decided to liquidate the corporate debtor as no resolution plan was received.

## Facts

Singhania International Limited filed a petition against Sham Udyog Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petition was admitted, and Mr. Narender Kumar Sharma was appointed as the Interim Resolution Professional (IRP) and later confirmed as the Resolution Professional (RP). The RP made a public announcement and visited the corporate debtor's premises, finding the factory dismantled. The RP filed CA No.236/2017 seeking directions for the suspended Board of Directors to cooperate. The RP took physical possession of the corporate debtor's land. The insolvency resolution process could not be completed within 180 days, and the period was extended by 90 days. The Committee of Creditors (CoC) approved the Information Memorandum. A forensic

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## Issues and analysis

### Issue 1: Whether the corporate debtor, M/s Sham Udyog, should be liquidated due to the absence of a …

**Ratio:** Section 33(2) of the Insolvency and Bankruptcy Code (IBC) allows the Adjudicating

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**Reasoning:** The Committee of Creditors (CoC) approved the liquidation of the corporate debtor with

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**Interpretation:** Section 33(2) provides a mechanism for liquidation when the CIRP fails to

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**Application:** In this case, the CoC voted to liquidate the corporate debtor, M/s Sham Udyog,

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Singhania…
- **Respondents:** Sham Udyog…

## Timeline

- **2017-11-21 — CIRP Init…**: The Tribunal admitted the petition initiating the Corporate Insolvency Resolution Process…
- **2017-12-05 — Public Annou…**: Public announcement was made in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33 — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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