# In the matter of Bhaskar Shrachi Alloys Ltd.

> NCLT judgment dated 2024-09-03. Citation: TCN-2024-NCLT-00686. The case involves an application filed by Chinar Steel Segment Center Private Limited, the…

- **Court:** NCLT
- **Order date:** 3 Sept 2024
- **Citation:** TCN-2024-NCLT-00686
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bhaskar-shrachi-alloys-ltd-602e2c01

## Summary

### Background

The case involves an application filed by Chinar Steel Segment Center Private Limited, the successful auction purchaser (SAP) of Bhaskar Shrachi Alloys Limited, a corporate debtor undergoing liquidation under the Insolvency and Bankruptcy Code (IBC), 2016. Chinar Steel sought directions from the National Company Law Tribunal (NCLT) to facilitate the extinguishment of existing equity shares of Bhaskar Shrachi Alloys, record the applicant's name as the new shareholder with depositories (NSDL and CDSL), change the Corporate Identification Number (CIN) to reflect its status as an unlisted company, and reconstitute the board of directors. The Calcutta Stock Exchange had already delisted the shares. However, NSDL and CDSL refused to extinguish the shares, claiming the NCLT's

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## Facts

Chinar Steel Segment Center Private Limited acquired Bhaskar Shrachi Alloys Limited through a legal process under the IBC, 2016, as a going concern in liquidation. The Corporate Debtor, Bhaskar Shrachi Alloys Limited, was admitted into CIRP on 27.09.2019. Respondent No.1 was confirmed as the IRP and then as RP. The Corporate Debtor went into liquidation vide order dated 29.04.2020 and the RP was subsequently appointed as the liquidator. Chinar Steel, as the successful auction purchaser, submitted an Acquisition Plan to take over the entirety of the share capital. The Calcutta Stock Exchange had delisted the shares of Bhaskar Shrachi Alloys on 11.01.2024. Chinar Steel approached NSDL and CDSL for extinguishment of the equity shares and issuance of fresh shares, but they

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## Issues and analysis

### Issue 1: Whether the NCLT should direct the extinguishment of the existing equity shares of the Corporate …

**Ratio:** The main motive of the IBC, 2016 is to resolve the stressed companies viz. the Corporate

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**Reasoning:** The NCLT reasoned that the applicant, having acquired the Corporate Debtor through a

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**Interpretation:** The interpretation is that the IBC aims to provide flexibility to the new

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**Application:** The NCLT applied this principle to the facts of the case, recognizing that the

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Chinar Steel…
- **Respondents:** Bhaskar Shrachi…; Samir Agarwal &…

## Timeline

- **2019-09-27 — CIRP Admi…**: Corporate Debtor was…
- **2020-04-29 — Liquidation…**: Corporate Debtor went…

## 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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