# In the matter of Varun Corporation Limited IA No. 1738-MB-2020 in CP (IB) No. 725-MB-2017

> NCLT judgment dated 2021-05-28. Citation: TCN-2021-NCLT-02085. This is an application by the liquidator of Varun Corporation Limited, the Corporate Debtor,…

- **Court:** NCLT
- **Order date:** 28 May 2021
- **Citation:** TCN-2021-NCLT-02085
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/varun-corporation-limited-ia-no-1738-mb-2020-in-cp-ib-no-725-mb-2017-dca54242

## Summary

### Background

This is an application by the liquidator of Varun Corporation Limited, the Corporate Debtor, seeking direction to Modest & Parsons International Private Limited, a member of the Committee of Creditors (CoC), for payment of Corporate Insolvency Resolution Process (CIRP) costs. The applicant also sought to punish the respondent for wilful disobedience of the order dated 07.03.2019 in MA No. 671 of 2018. Varun Corporation Limited entered CIRP on 30.06.2017. The NCLT ordered liquidation on 18.05.2018 and appointed the applicant as liquidator. The CoC agreed on 30.01.2018 to bear the CIRP costs. The Resolution Professional filed MA No. 671 of 2018 seeking directions regarding CIRP costs. The NCLT directed the CoC members to contribute proportionately towards the CIRP

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## Facts

Varun Corporation Limited entered CIRP on 30.06.2017. The NCLT ordered liquidation on 18.05.2018 and appointed the applicant as liquidator. Modest & Parsons International Private Limited was a member of the Committee of Creditors (CoC). The CoC agreed on 30.01.2018 to bear the CIRP costs. The Resolution Professional filed MA No. 671 of 2018 seeking directions regarding CIRP costs. The NCLT directed the CoC members to contribute proportionately towards the CIRP costs on 07.03.2019. The Mauritius Commercial Bank and Standard Chartered Bank paid their share of the CIRP costs. Modest & Parsons International Private Limited was obliged to pay ₹. 23,20,535/- which included the fees of the RP. The applicant requested the respondent to make the payment within 15 days

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## Issues and analysis

### Issue 1: Whether the Respondent should be directed to pay the outstanding CIRP costs of ₹. 18,20,535/- as …

**Ratio:** The CoC is responsible for bearing the CIRP costs, as established in the resolution

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**Reasoning:** The NCLT considered the previous order dated 07.03.2019, which directed the CoC members

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**Interpretation:** The legal issue revolves around the interpretation of the CoC's responsibility

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

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## Parties

- **Judges:** Janab Mohammed…; V. Nallasen…
- **Appellants:** Prakash K.…
- **Respondents:** Varun Corporation…; Modest & Parsons…

## Timeline

- **2017-06-30 — CIRP Commen…**: Varun Corporation Limited…
- **2018-01-30 — CoC Meet…**: The CoC agreed to bear…

## 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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