# In the matter of VRJ Traders Private Limited IB-151(ND)-2021

> NCLT judgment dated 2021-12-22. Citation: TCN-2021-NCLT-00080. VRJ Traders Private Limited, the Corporate Applicant, filed an application under Section 10 of…

- **Court:** NCLT
- **Order date:** 22 Dec 2021
- **Citation:** TCN-2021-NCLT-00080
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vrj-traders-private-limited-ib-151nd-2021-18badaf0

## Summary

### Background

VRJ Traders Private Limited, the Corporate Applicant, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Applicant was engaged in the business of showcasing and exporting premium arts and handicrafts. Due to a recession period and depreciation of the Rupee versus the Dollar, the company suffered losses, leading to a decline in operations. The Corporate Applicant annexed the Minutes of the Extraordinary General meeting dated 31.12.2020, resolving to file the application under section 10 of IBC, 2016.

## Facts

VRJ Traders Private Limited, engaged in exporting handicrafts, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP. The company faced financial distress due to a recession from 2008-2010, leading to decreased demand for Indian handicrafts, and further losses due to the depreciation of the Rupee against the Dollar. An Extraordinary General Meeting on 2020-12-31 resolved to file for insolvency. The company's financial statements for the years ending 2019-03-31 and 2020-03-31, along with a provisional balance sheet dated 2021-02-15, were submitted. The Tribunal directed the applicant to file an additional affidavit regarding variations in financial figures. The applicant submitted an auditor's certificate dated 2021-04-22.

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Applicant under Section 10 of the Insolvency and …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate applicant to

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**Reasoning:** The Tribunal examined the application and the submissions made by the learned counsel and

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**Interpretation:** Section 10 provides the mechanism for a corporate debtor to initiate insolvency

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**Application:** The Tribunal applied Section 10 to the facts of the case, finding that VRJ

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## Parties

- **Judges:** P.S.N. P…; RAHUL BHA…
- **Respondents:** VRJ TRADERS…

## Timeline

- **2020-12-31 — Extraordinary General…**: Members of VRJ Traders Private Limited resolved to file an application under section 10…
- **2021-02-15 — Provisional Balance…**: Corporate Applicant filed a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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