# In the matter of Cethar Limited IA-174-2022 in CP-511-IB-2017

> NCLT judgment dated 2022-03-03. Citation: TCN-2022-NCLT-03908. The case involves an application (IA/174/2022) filed in CP/511/IB/2017 under Section 60(5) of…

- **Court:** NCLT
- **Order date:** 3 Mar 2022
- **Citation:** TCN-2022-NCLT-03908
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cethar-limited-ia-174-2022-in-cp-511-ib-2017-31d46891

## Summary

### Background

The case involves an application (IA/174/2022) filed in CP/511/IB/2017 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, concerning Cethar Limited. CIRP was initiated on 2017-06-16. The applicant, Asset Reconstruction Company (India) Ltd., sought to record a Joint Compromise Memo dated 2022-02-14 entered into between the parties. Liquidation was ordered on 2018-04-25 after no resolution plan was approved. The applicant is a secured creditor with a mortgage on property at Boothagudi and Melapachagudi Village. The applicant initiated a sale of the property, and Winwind Power Energy Pvt. Ltd. emerged as the highest bidder. Disputes arose, leading to the Joint Compromise Memo, which was initially filed before NCLAT.

## Facts

Asset Reconstruction Company (India) Ltd. (ARCIL), acting as a trustee, initiated proceedings concerning Cethar Limited, the Corporate Debtor. CIRP was initiated on 2017-06-16, and after no resolution plan was approved, liquidation was ordered on 2018-04-25. ARCIL, a secured creditor, had a mortgage on Cethar Limited's property. ARCIL initiated a sale of the property, and Winwind Power Energy Pvt. Ltd. emerged as the highest bidder with a bid of Rs.62,02,00,000/-. Disputes arose, leading to the filing of multiple applications and challenges to orders. To resolve these disputes and maximize the value of the Corporate Debtor's assets, ARCIL, the respondents, and Cethar Limited entered into a Joint Compromise Memo dated 2022-02-14. This memo was initially filed before

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## Issues and analysis

### Issue 1: Whether the Joint Compromise Memo dated 2022-02-14, entered into between the parties, can be …

**Ratio:** Section 60(5) of the Insolvency and Bankruptcy Code, 2016, provides the NCLT with the

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**Reasoning:** The NCLT reasoned that the Joint Compromise Memo was entered into by the parties with a

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**Interpretation:** Section 60(5) is interpreted broadly to allow the NCLT to address any issues

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**Application:** The NCLT applied this ratio by taking the Joint Compromise Memo on record,

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Cethar Li…; ICICI Bank,…
- **Advocates:** Abitha…; Syed Datha Jaffar…; +5 more

## Timeline

- **2017-06-16 — CIRP Init…**: CIRP initiated in respect of the…
- **2018-04-25 — Liquidation…**: Liquidation of the Corporate…

## 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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