# In the matter of Vajram Spinning Mills Private Limited IA-931-2020 in IBA-763-2019

> NCLT judgment dated 2021-04-20. Citation: TCN-2021-NCLT-02331. The case involves an application filed under Section 33(1)(a) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 Apr 2021
- **Citation:** TCN-2021-NCLT-02331
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vajram-spinning-mills-private-limited-ia-931-2020-in-iba-763-2019-60db7b5c

## Summary

### Background

The case involves an application filed under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016, seeking liquidation of M/s. Vajram Spinning Mills Private Limited. An earlier Section 7 application by the Financial Creditor led to the initiation of the Corporate Insolvency Resolution Process (CIRP) on 30.01.2020, and the appointment of an Interim Resolution Professional (IRP). The IRP made a public announcement and invited claims. The Committee of Creditors (CoC), consisting of the sole Financial Creditor, met and appointed the Applicant as the Resolution Professional. Two IBBI Registered Valuers were appointed to value the assets. Despite issuing Expressions of Interest, no resolution applicants responded.

## Facts

M/s. Vajram Spinning Mills Private Limited underwent Corporate Insolvency Resolution Process (CIRP) initiated by a Section 7 application from the Financial Creditor. The CIRP was initiated on 2020-01-30. S. Muthuraju was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). Public announcements were made to invite claims. Two IBBI Registered Valuers were appointed to value the assets of the Corporate Debtor. Despite issuing Expressions of Interest (EoI) on 2020-08-06 and 2020-08-28, no resolution plans were received. The Committee of Creditors (CoC) noted that the Corporate Debtor had not been carrying on business for more than 5 years and was not generating any income. The CoC decided to liquidate the Corporate Debtor in

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, M/s. Vajram Spinning Mills Private Limited, should be liquidated due …

**Ratio:** Section 33 of the Insolvency and Bankruptcy Code, 2016, allows for the liquidation of a

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**Reasoning:** The Tribunal considered that the Corporate Debtor had not been carrying on business for

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**Interpretation:** Section 33 of the IBC, 2016, is interpreted to mean that if the CIRP fails and

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**Application:** In this case, the CIRP failed because no resolution plans were received. The

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Respondents:** M/s. Vajram…

## Timeline

- **2020-01-30 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against M/s. Vajram Spinning…
- **2020-02-02 — Public Annou…**: Public announcement made under Section…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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