# In the matter of Shree Santosh Cotton Spin Pvt. Ltd. IA 350-2020 in CP (I.B) 564-NCLT-AHM-2019

> NCLT judgment dated 2020-08-03. Citation: TCN-2020-NCLT-00913. The case involves an application (IA No. 350 of 2020) filed by the Resolution Professional (RP)…

- **Court:** NCLT
- **Order date:** 3 Aug 2020
- **Citation:** TCN-2020-NCLT-00913
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-santosh-cotton-spin-pvt-ltd-ia-350-2020-in-cp-ib-564-nclt-ahm-2019-1d2fd18c

## Summary

### Background

The case involves an application (IA No. 350 of 2020) filed by the Resolution Professional (RP) of Shree Santosh Cotton Spin Private Limited in Company Petition (IB) No. 564 of 2019, seeking liquidation of the Corporate Debtor under Section 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code, 2016 (IB Code). The Corporate Insolvency Resolution Process (CIRP) was initiated based on a petition filed by an Operational Creditor, Mr. Unisbhai Valibhai Lingadiya, under Section 9 of the IB Code. The CIRP was admitted on 2019-10-10, and Mr. Bhupendra Singh Narayan Singh Rajput was appointed as the Interim Resolution Professional (IRP).

## Facts

Mr. Unisbhai Valibhai Lingadiya, an Operational Creditor, filed CP (IB) No. 564 of 2019 against Shree Santosh Cotton Spin Private Limited under Section 9 of the IB Code, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP). The CIRP was admitted on 2019-10-10, and Mr. Bhupendra Singh Narayan Singh Rajput was appointed as the Interim Resolution Professional (IRP). The Committee of Creditors (CoC) decided in its first meeting on 2019-11-13 to continue with the IRP as RP. In the fourth CoC meeting held on 2020-06-15, the CoC unanimously decided to liquidate the Corporate Debtor due to the absence of any resolution plan or ongoing business. The RP then filed IA No. 350 of 2020 seeking liquidation under Section 33(1), 33(2), and 34(1) of the IB

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor, Shree Santosh Cotton Spin Private …

**Ratio:** The commercial wisdom of the Committee of Creditors (CoC) is paramount in deciding

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**Reasoning:** The CoC unanimously decided to liquidate the Corporate Debtor in its fourth meeting held

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**Interpretation:** Section 33(1), 33(2), and 34(1) of the IB Code allow for the liquidation of a

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**Application:** In this case, the CoC's decision to liquidate was based on the absence of a

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Bhupendra Singh…
- **Respondents:** Shree Santosh…; COC (Bank of…

## Timeline

- **2019-10-10 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated and Mr. Bhupendra Singh Narayan…
- **2019-11-13 — First CoC M…**: Committee of Creditors (CoC) decided…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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