# In the matter of Spruce Trading Pvt. Ltd. IA 677-2019 in C.P. (IB)-312(MB)-2018

> NCLT judgment dated 2020-03-04. Citation: TCN-2020-NCLT-01674. The case pertains to IA 677/2019 filed in C.P.(IB)-312(MB)/2018, an application under Section…

- **Court:** NCLT
- **Order date:** 4 Mar 2020
- **Citation:** TCN-2020-NCLT-01674
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/spruce-trading-pvt-ltd-ia-677-2019-in-cp-ib-312mb-2018-75fe3a8c

## Summary

### Background

The case pertains to IA 677/2019 filed in C.P.(IB)-312(MB)/2018, an application under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking liquidation of the Corporate Debtor, European Projects & Aviation Ltd. The Corporate Debtor was undergoing CIRP initiated on 12.09.2018. The Committee of Creditors (CoC) was formed on 26.10.2018, comprising operational creditors due to the absence of financial creditors. The CoC initially considered the Corporate Debtor as not a going concern and recommended liquidation, but later decided to wait for a valuation report and forensic audit based on the Resolution Professional's suggestion. Subsequently, the CoC unanimously resolved to recommend liquidation, considering the Corporate Debtor's business in the Telecom

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## Facts

European Projects & Aviation Ltd. was undergoing Corporate Insolvency Resolution Process (CIRP) initiated on 2018-09-12. The Committee of Creditors (CoC) was constituted on 2018-10-26, comprising four Operational Creditors because there were no Financial Creditors. In the first CoC meeting on 2018-11-02, Ms. Subha Pal was appointed as the Resolution Professional (RP). On the same day, the CoC initially decided to recommend liquidation, considering the Corporate Debtor was not a going concern. However, on the RP's suggestion, the CoC decided to wait for a valuation report and forensic audit. In a subsequent meeting on 2019-01-08, the CoC considered that the Corporate Debtor, operating in the Telecom sector, could not continue its business, and there was no scope for

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, European Projects & Aviation Ltd., should be liquidated under …

**Ratio:** Section 33(2) of the Insolvency and Bankruptcy Code, 2016 allows for the initiation of

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**Reasoning:** The court considered the submissions made and perused the petition. The Committee of

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**Interpretation:** Section 33(2) provides a mechanism for liquidation when revival is not

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**Application:** In this case, the CoC unanimously recommended liquidation, and the court agreed

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## Parties

- **Judges:** SHRI. RAJASEKHAR…; RavikumarDu…
- **Respondents:** European Projects…; Spruce Trading…

## Timeline

- **2018-09-12 — CIRP Init…**: CIRP was initiated…
- **2018-10-26 — CoC Form…**: The Committee of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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