# In the matter of Bombay Rayons Fashions Limited IA 3668-2022 in CP (IB) No.1443-MB-IV-2020

> NCLT judgment dated 2023-01-20. Citation: TCN-2023-NCLT-04964. The case involves an application filed by the Resolution Professional of Bombay Rayon Fashions…

- **Court:** NCLT
- **Order date:** 20 Jan 2023
- **Citation:** TCN-2023-NCLT-04964
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bombay-rayons-fashions-limited-ia-3668-2022-in-cp-ib-no1443-mb-iv-2020-6779b042

## Summary

### Background

The case involves an application filed by the Resolution Professional of Bombay Rayon Fashions Limited under Section 60(5) of the Insolvency & Bankruptcy Code, 2016, seeking directions to conclude the sale of the Corporate Debtor's Mysore Unit. The Corporate Debtor was admitted into CIRP on 07.06.2022. Prior to CIRP, the Corporate Debtor had availed financial assistance from Allahabad Bank and mortgaged the Mysore Unit. The Corporate Debtor defaulted on loan repayment, leading to a demand notice under the SARFAESI Act. Allahabad Bank assigned the outstanding debt and security interest to JMFARCL. JMFARC took symbolic possession of the Mysore Unit. An agreement for sale of the Mysore Unit was entered into with Mr. Adil Azeez and Mr. Azim Azeez on 26.04.2022, but the

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## Facts

Bombay Rayon Fashions Limited (Corporate Debtor) faced financial difficulties and availed financial assistance from Allahabad Bank, mortgaging its Mysore Unit. The Corporate Debtor defaulted on loan repayments, leading to a demand notice under the SARFAESI Act. Allahabad Bank assigned the debt and security interest to JMFARCL, which took symbolic possession of the Mysore Unit. Before CIRP commencement, an agreement for sale of the Mysore Unit was entered into with Mr. Adil Azeez and Mr. Azim Azeez on 26.04.2022, with INR 9,00,00,000 already paid. The Corporate Debtor was admitted into CIRP on 07.06.2022. The Resolution Professional filed an application to conclude the sale of the Mysore Unit. The CoC approved the sale on 11.11.2022 with a 99.77% majority. The applicant

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## Issues and analysis

### Issue 1: Whether the sale of the Mysore Unit of the Corporate Debtor can be concluded during the CIRP …

**Ratio:** The ratio is based on the principle that the Adjudicating Authority has the power to

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**Reasoning:** The court reasoned that a readily available buyer exists for the Mysore Unit, and

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**Interpretation:** The interpretation involves balancing the interests of all stakeholders,

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where an

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Satish Kuma…
- **Respondents:** Bombay Rayon…; Adil Azeez…

## Timeline

- **2018-05-22 — Demand N…**: Allahabad Bank issued a demand notice to the Corporate Debtor under Section 13(2) of the…
- **2018-09-27 — Assignment Ag…**: Allahabad Bank assigned the outstanding…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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