# In the matter of Ultra Tile Pvt. Ltd. IA-558(CHE)-2021 in IBA-1263-2019

> NCLT judgment dated 2021-08-12. Citation: TCN-2021-NCLT-01362. The case involves an application before the National Company Law Tribunal (NCLT), Chennai,…

- **Court:** NCLT
- **Order date:** 12 Aug 2021
- **Citation:** TCN-2021-NCLT-01362
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ultra-tile-pvt-ltd-ia-558che-2021-in-iba-1263-2019-74106007

## Summary

### Background

The case involves an application before the National Company Law Tribunal (NCLT), Chennai, concerning the insolvency resolution process of Ultra Tile Pvt Ltd. The Interim Resolution Professional (IRP) failed to appoint registered valuers to determine the fair value and liquidation value of the corporate debtor's assets as mandated by Regulation 27 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Committee of Creditors (CoC), with only one financial creditor, resolved to liquidate the company without exploring other resolution options or obtaining valuation reports. The erstwhile promoter expressed interest in finding buyers for the business as a going concern.

## Facts

The Interim Resolution Professional (IRP) of Ultra Tile Pvt Ltd failed to appoint registered valuers within the stipulated timeframe as per Regulation 27 of the IBBI Regulations, 2016. The Committee of Creditors (CoC), consisting of a single financial creditor (Kotak Mahindra Bank Limited), resolved to liquidate the Corporate Debtor in the 2nd CoC meeting held on 07.05.2021, without considering other resolution options or obtaining valuation reports. The erstwhile promoter, Mr. Venkatarama Krishnamurthy, stated that there were potential buyers interested in purchasing the business as a going concern. The CoC's decision to liquidate was based on the assessment that the company was not functional and revival was not economically viable. The IRP sent a mail to the sole

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) can resolve to liquidate the Corporate Debtor without …

**Ratio:** Regulation 27 of the IBBI (Insolvency Resolution Process for Corporate Persons)

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**Reasoning:** The NCLT found that the CoC's decision to liquidate the Corporate Debtor without

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**Interpretation:** The IBBI Regulations establish a framework for the insolvency resolution

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**Application:** In this case, the CoC's failure to appoint registered valuers and explore other

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Respondents:** Ultra Tile…

## Timeline

- **2021-05-07 — 2nd CoC M…**: The sole Financial Creditor passed a resolution for liquidation of the Corporate Debtor…
- **2021-05-04 — Financial Creditor's…**: The Financial Creditor sent a reply vide email dated 4th May 2021 which is submitted as…

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