# In the matter of Avinash EM Projects Private Limited

> NCLT judgment dated 2024-03-18. Citation: TCN-2024-NCLT-02035. The case involves applications IA-6451/2023 and IA-5461/2023 in the matter of Bhotika Trade &…

- **Court:** NCLT
- **Order date:** 18 Mar 2024
- **Citation:** TCN-2024-NCLT-02035
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/avinash-em-projects-private-limited-2cbec902

## Summary

### Background

The case involves applications IA-6451/2023 and IA-5461/2023 in the matter of Bhotika Trade & Services Pvt. Ltd. versus Avinash EM Projects Private Limited. IA-5461/2023 was filed by Sudhir Kumar Awasthi, the Suspended Director, seeking the return of third-party goods and machinery located at the Corporate Debtor's premises. IA-6451/2023 pertains to the resolution professional seeking liquidation of the corporate debtor, based on a decision by the Committee of Creditors (CoC). The CoC voted with 75.96% share to initiate liquidation, rejecting a prior resolution for publication of Form G. The Adjudicating Authority is considering the liquidation application under Section 33(2) of the Insolvency and Bankruptcy Code (IBC), 2016.

## Facts

Bhotika Trade & Services Pvt. Ltd. is the Operational Creditor, while Avinash EM Projects Private Limited is the Corporate Debtor. Sudhir Kumar Awasthi, the Suspended Director, filed IA-5461/2023 seeking the return of third-party goods and machinery. The Committee of Creditors (CoC) rejected the resolution for publication of Form G. In the 4th CoC meeting held on 2023-11-18, the CoC passed a resolution with 75.96% vote share to initiate liquidation of the Corporate Debtor. The Resolution Professional (RP) placed the agenda for Form G issuance before the CoC, which was rejected. An earlier NCLAT order in Company Appeal (AT) (Insolvency) No. 1540 of 2022, 'Hero Fincorp Limited versus M/s Hema Automotive Private Limited', directed the CoC to reconsider its decision,

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## Issues and analysis

### Issue 1: Whether the Suspended Director, Mr. Sudhir Kumar Awasthi, has the locus standi to file IA-5461/2023 …

**Ratio:** The ratio is that under Sections 17, 18, and 25 of the IBC, the control and management of

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**Reasoning:** The court reasoned that the Suspended Director lacks the authority to direct the RP

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**Interpretation:** This interpretation clarifies the scope of authority of a suspended director

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**Application:** The court applied this ratio to the facts by holding that Mr. Awasthi, as a

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. SUBRATA KUMAR…
- **Respondents:** AVINASH EM…; Avinash EM…

## Timeline

- **2023-11-18 — 4th CoC M…**: The Committee of Creditors (CoC) passed a resolution with 75.96% vote share to initiate…
- **2023-10-31 — 3rd CoC M…**: The agenda for issuance of Form G and inviting resolution plans was rejected by the CoC…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33 — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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