# Approval of Resolution Plan - Carnation Industries Limited

> NCLT judgment dated 2024-06-05. Citation: TCN-2024-NCLT-01225. The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 5 Jun 2024
- **Citation:** TCN-2024-NCLT-01225
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/approval-of-resolution-plan-carnation-industries-limited-51328e7f

## Summary

### Background

The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rules, 2016, filed by Dhansagar Dealers Private Limited, an unsuccessful resolution applicant, challenging the resolution plan of Carnation Industries Limited. The applicant contends that the resolution plan was illegally and arbitrarily approved by the Committee of Creditors (CoC) and seeks consideration of its enhanced/revised plan. The Resolution Professional (RP) received two resolution plans, one from the successful resolution applicant (SRA), Mr. Vikas Garg, and another from Dhansagar Dealers Private Limited. The CoC approved Mr. Garg's plan with 100% voting on April 20, 2024. The RP issued a Letter of Intent

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## Facts

Lal Behari Singh, an operational creditor, initiated CIRP against Carnation Industries Limited under Section 9 of the I&B Code, which was admitted on September 12, 2023. The applicant, Anubrata Gangoly, was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). Public announcement was made on September 15, 2023, inviting claims from creditors. ICICI Bank Limited, a financial creditor, submitted its claim on November 13, 2023, and was inducted into the CoC. The Committee of Creditors (CoC) was formed on October 5, 2023, initially with the sole operational creditor, but later reconstituted with ICICI Bank Limited holding 100% voting share. The RP appointed registered valuers, and the valuation exercise was completed on

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## Issues and analysis

### Issue 1: Whether, after approval of the resolution plan and issuance of the Letter of Intent (LoI), an …

**Ratio:** The legal principle applied is that the commercial wisdom of the Committee of Creditors

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**Reasoning:** The court reasoned that once the CoC approves a plan, it becomes a binding contract

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**Interpretation:** The interpretation is that the legislative scheme of the I&B Code, as

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**Application:** In this specific case, the court noted that the plan value of the unsuccessful

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Dhansagar Dealers…
- **Respondents:** CARNATION…; ANUBRATA GANGOLY,…

## Timeline

- **2021-09-12 — CIRP Init…**: Application under Section 9 of the I&B Code,…
- **2023-09-15 — Public Annou…**: Public announcement in Form A…

## 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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