# In the matter of Tara Chand Rice Mills Private Limited CA No. 609-2018 in CP (IB) No. 121-Chd-Hry-2017

> NCLT judgment dated 2019-02-12. Citation: TCN-2019-NCLT-04901. The application was filed for passing an order for the liquidation of Tara Chand Rice Mills…

- **Court:** NCLT
- **Order date:** 12 Feb 2019
- **Citation:** TCN-2019-NCLT-04901
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tara-chand-rice-mills-private-limited-ca-no-609-2018-in-cp-ib-no-121-chd-hry-201-de15319b

## Summary

### Background

The application was filed for passing an order for the liquidation of Tara Chand Rice Mills Pvt. Ltd. The Corporate Insolvency Resolution Process (CIRP) was initiated following a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Brij Lal Ashok Kumar, an operational creditor. The petition was admitted, and a moratorium was declared. Sameer Rastogi was appointed as the Interim Resolution Professional and later as the Resolution Professional. The Committee of Creditors (COC) was constituted and modified as claims from other financial creditors were received. Several COC meetings were held to discuss the resolution plan. Despite negotiations and improvements to the financial bid by the highest bidder, the COC unanimously decided to liquidate

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## Facts

Brij Lal Ashok Kumar, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Tara Chand Rice Mills Pvt. Ltd. The petition was admitted, and a moratorium was declared. Sameer Rastogi was appointed as the Interim Resolution Professional and later as the Resolution Professional. The Committee of Creditors (COC) was constituted and modified as claims from other financial creditors were received. Several COC meetings were held to discuss the resolution plan. Despite negotiations and improvements to the financial bid by the highest bidder, the COC unanimously decided to liquidate the corporate debtor because the liquidation value was meager and insufficient for the creditors to recover their dues. The

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Tara Chand Rice …

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

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**Reasoning:** The COC unanimously decided not to approve the resolution plan submitted and to liquidate

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**Interpretation:** Section 33(2) provides a mechanism for liquidation when a resolution plan fails

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**Application:** The COC, representing more than 66% of the voting share, decided to liquidate

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Brij Lal Ashok…
- **Respondents:** Tara Chand Rice…

## Timeline

- **2017-01-01 — CP (IB) No. 121/Chd/Hry/…**: Filing of CP (IB) No.…
- **2018-03-16 — Petition Ad…**: Petition under Section 9 of the Code was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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