# In the matter of Sona Alloys Pvt Ltd I.A. No. 397 of 2020 in CP(IB) No. 586 of 2019

> NCLT judgment dated 2020-12-04. Citation: TCN-2020-NCLT-00148. The case involves an application filed by the Liquidator under Section 60(5)(c) of the…

- **Court:** NCLT
- **Order date:** 4 Dec 2020
- **Citation:** TCN-2020-NCLT-00148
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sona-alloys-pvt-ltd-ia-no-397-of-2020-in-cpib-no-586-of-2019-6e2a84ca

## Summary

### Background

The case involves an application filed by the Liquidator under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016, seeking substantive consolidation of the Corporate Debtor (Sona Alloys Pvt. Ltd.) and Respondents Nos. 2-6 into a single proceeding for the purpose of CIRP. The application was filed in light of separate CIRP proceedings initiated against the Corporate Debtor and the Respondents. The Operational Creditor, P & M associates LLP, had filed an application under section 9 of the IB Code against Sona Alloys, and another petition was filed by Noble Resources. CIRP was initiated against Ganga Advisory Pvt. Ltd. and Neuromed Imaging Centre Pvt. Ltd. under section 7 of the IB Code.

## Facts

P & M Associates LLP, an operational creditor, initiated CIRP against Sona Alloys Pvt. Ltd. under Section 9 of the IB Code. Noble Resources also filed a petition against Sona Alloys under Section 9. The CIRP against Sona Alloys was admitted on 2020-06-16. Pani Logistics, a financial creditor, initiated CIRP against Ganga Advisory Pvt. Ltd. under Section 7 of the IB Code, which was admitted on 2019-01-24. Mahaveer Transport, a financial creditor, initiated CIRP against Neuromed Imaging Centre Pvt. Ltd. under Section 7 of the IB Code, which was admitted on 2019-07-12. The Liquidator filed an application under Section 60(5)(c) of the IB Code seeking substantive consolidation of the Corporate Debtor (Sona Alloys) and Respondents 2-6. Respondents 2-6 hold substantive

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## Issues and analysis

### Issue 1: Whether the application for substantive consolidation of the Corporate Debtor and Respondents Nos. …

**Ratio:** Substantial consolidation as a remedy should always be treated as an exception rather

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**Reasoning:** The Adjudicating Authority reasoned that the IB Code does not provide for consolidation

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**Interpretation:** The court interpreted that the IB Code's primary objective is resolution, not

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**Application:** The court applied the ratio by determining that since the companies involved

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Pani Logi…
- **Respondents:** Sona Alloys Pvt.…; Sona Alloys Pvt…

## Timeline

- **2020-06-16 — CIRP Admi…**: CIRP against Sona Alloys…
- **2019-01-24 — CIRP Admi…**: CIRP against Ganga Advisory…

## 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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