# In the matter of Varanasi Auto Sales Limited CA No. 121 of 2019 in CP(IB) 64-ALD-2017

> NCLT judgment dated 2021-03-16. Citation: TCN-2021-NCLT-02676. The case involves an application filed under Section 33(1)(a) read with 33(2) of the Insolvency…

- **Court:** NCLT
- **Order date:** 16 Mar 2021
- **Citation:** TCN-2021-NCLT-02676
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/varanasi-auto-sales-limited-ca-no-121-of-2019-in-cpib-64-ald-2017-54aab529

## Summary

### Background

The case involves an application filed under Section 33(1)(a) read with 33(2) of the Insolvency and Bankruptcy Code by the Resolution Professional seeking an order for the liquidation of Varanasi Auto Sales Limited, the Corporate Debtor. The Adjudicating Authority had previously initiated the CIRP based on a petition filed by the Corporate Applicant under Section 10 of the Code and appointed an IRP, later replaced by Mr. Yogesh Gupta. Despite efforts to progress the CIRP, including floating an Expression of Interest, no resolution plan was submitted by the deadline. The Committee of Creditors (COC) passed resolutions recommending liquidation due to the non-availability of a resolution plan.

## Facts

Varanasi Auto Sales Limited underwent Corporate Insolvency Resolution Process (CIRP) following an application under Section 10 of the Insolvency and Bankruptcy Code (IBC). Mr. Hemant Sharma was initially appointed as the Interim Resolution Professional (IRP), later replaced by Mr. Yogesh Gupta. An Expression of Interest was floated to invite resolution plans, but no resolution plan was submitted to the Committee of Creditors (COC) by the specified deadline. The COC, in its 4th meeting, passed a resolution with 89.18% voting share recommending the liquidation of the corporate debtor due to the non-availability of a resolution plan. A prospective resolution applicant, Mr. Amit Gupta, raised objections, but these were not considered. The Adjudicating Authority considered

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## Issues and analysis

### Issue 1: Whether the liquidation order can be passed in respect of the Corporate Debtor, Varanasi Auto Sales …

**Ratio:** Section 33(1) of the Insolvency and Bankruptcy Code (IBC) allows the Adjudicating

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**Reasoning:** The court reasoned that no resolution plan had been received despite efforts to solicit

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**Interpretation:** Section 33(1) provides a clear pathway for liquidation when the CIRP fails to

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**Application:** In this case, the absence of a resolution plan and the COC's strong support for

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## Parties

- **Judges:** Rajesh Daya…
- **Respondents:** Varanasi Auto…

## Timeline

- **2017-01-01 — CP(IB) NO.64/…**: Case init…
- **2018-04-26 — Adjudicating Authority…**: The Adjudicating Authority initiated the CIRP based on a petition filed by the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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