# In the matter of Somnath Textile Pvt. Ltd. & ors. C.P. (I.B) No. 49-10-NCLT-AHM-2018

> NCLT judgment dated 2018-02-05. Citation: TCN-2018-NCLT-01876. The case involves an application filed by the resolution professional seeking an order of…

- **Court:** NCLT
- **Order date:** 5 Feb 2018
- **Citation:** TCN-2018-NCLT-01876
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/somnath-textile-pvt-ltd-ors-cp-ib-no-49-10-nclt-ahm-2018-7fcdf0e4

## Summary

### Background

The case involves an application filed by the resolution professional seeking an order of liquidation for Somnath Textile Pvt Ltd. The Corporate Insolvency Resolution Process (CIRP) was initiated based on a petition filed by Somnath Textile Pvt Ltd under section 10 of the Code, and an Interim Resolution Professional (IRP) was appointed. The Committee of Creditors (COC) in its seventh meeting held on 27.12.2017 resolved that a resolution plan was not feasible and decided to proceed with liquidation, continuing with Mr. Premraj Ramratan Laddha as the liquidator.

## Facts

Somnath Textile Pvt Ltd initiated CIRP by filing a petition under Section 10 of the Insolvency and Bankruptcy Code (IBC). An IRP was appointed. The COC, in its seventh meeting on December 27, 2017, concluded that a resolution plan was not viable. Consequently, the COC resolved to proceed with liquidation and to continue with Mr. Premraj Ramratan Laddha as the liquidator. The 180-day period for arriving at a resolution plan had expired. The resolution professional filed an application seeking an order of liquidation under section 33(2) of the Code. The Adjudicating Authority considered these facts and determined that liquidation was appropriate.

## Issues and analysis

### Issue 1: Whether an order of liquidation should be passed for Somnath Textile Pvt Ltd given the failure to …

**Ratio:** When a resolution plan cannot be achieved within the prescribed timeframe and the COC

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**Reasoning:** The court reasoned that the COC had resolved to proceed with liquidation after

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**Interpretation:** Section 33(2) of the IBC allows for liquidation when a resolution plan is not

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**Application:** In this case, the COC's resolution and the expiration of the resolution period

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Manorama…
- **Appellants:** Premraj Ramratan…
- **Respondents:** Somnath Textile…

## Timeline

- **2017-12-27 — COC Meet…**: The COC in its seventh meeting resolved that it is not possible to have a resolution plan…
- **2018-02-05 — Order for Liq…**: The Adjudicating Authority ordered the liquidation of Somnath Textile Pvt Ltd and…

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