# In the matter of Sri Karunambikai Mills Private Limited MA-667-2019 in CP-1083-IB-2018

> NCLT judgment dated 2019-07-09. Citation: TCN-2019-NCLT-02604. The case pertains to an application filed under Section 33(2) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 9 Jul 2019
- **Citation:** TCN-2019-NCLT-02604
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-karunambikai-mills-private-limited-ma-667-2019-in-cp-1083-ib-2018-f0218641

## Summary

### Background

The case pertains to an application filed under Section 33(2) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking liquidation of the Corporate Debtor, M/s. Sri Karunambikai Mills Private Limited. The Company Petition was admitted on 26.09.2018, and Mr. K. Ranganathan Seshadri was appointed as the Interim Resolution Professional (IRP). Claims were collated, and a Committee of Creditors (CoC) was constituted. Valuers were appointed to ascertain the liquidation value of the Corporate Debtor. Mr. A.R. Ramasubramania Raja was subsequently appointed as the Resolution Professional (RP) in place of the IRP. The RP determined the liquidation value as ₹31 Crores against the claim of ₹80 Crores.

## Facts

The Corporate Debtor, M/s. Sri Karunambikai Mills Private Limited, faced insolvency proceedings. An application was filed under Section 33(2) of the IBC, 2016, seeking liquidation. The Company Petition was admitted on 2018-09-26. Mr. K. Ranganathan Seshadri was initially appointed as the IRP, followed by Mr. A.R. Ramasubramania Raja as the RP. The RP determined the liquidation value to be ₹31 Crores against a claim of ₹80 Crores. No viable resolution plan emerged, leading the CoC to unanimously resolve for liquidation on 2019-06-20 with 100% voting. The RP then placed an application before the NCLT seeking liquidation based on the CoC's resolution. The CoC's decision to opt for liquidation indicates a lack of confidence in the possibility of a successful resolution,

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor under Section 33(2) of the IBC, …

**Ratio:** The ratio is that when the CoC, after due consideration, passes a resolution for

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**Reasoning:** The court reasoned that the CoC had unanimously passed a resolution for liquidation, and

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**Interpretation:** Section 33(2) of the IBC allows for the initiation of liquidation proceedings

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** B.S.V. Prakash…
- **Appellants:** A.R.Ramasubramania…
- **Respondents:** Karunambikai…

## Timeline

- **2018-09-26 — Company Petition…**: The Company Petition was admitted, and Mr. K.…
- **2019-06-20 — CoC Resolution for…**: The CoC unanimously passed a resolution for…

## 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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