# In the matter of Classic Bottle Caps Private Limited

> NCLT judgment dated 2023-08-21. Citation: TCN-2023-NCLT-01974. The case involves an application (IA No. 3316 of 2020) filed by Mr. Subhash Kumar Kundra, the…

- **Court:** NCLT
- **Order date:** 21 Aug 2023
- **Citation:** TCN-2023-NCLT-01974
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/classic-bottle-caps-private-limited-eebb9804

## Summary

### Background

The case involves an application (IA No. 3316 of 2020) filed by Mr. Subhash Kumar Kundra, the Resolution Professional (now Liquidator) of Classic Bottle Caps Private Limited, under Sections 45, 49, and 66 read with Section 25(2)(j) and 60(5)(a) of the Insolvency and Bankruptcy Code (IBC) 2016. The application seeks to address certain transactions deemed undervalued or fraudulent. GAC Shipping (India) Private Limited, an Operational Creditor, initiated the Corporate Insolvency Resolution Process (CIRP) against Classic Bottle Caps Private Limited. The Adjudicating Authority initiated the CIRP on February 13, 2020, appointing Mr. Rattan Chaudhry IP as the Interim Resolution Professional (IRP). Subsequently, Mr. Subhash Kumar Kundra IP replaced him as the Resolution

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## Facts

GAC Shipping (India) Private Limited initiated CIRP against Classic Bottle Caps Private Limited. Mr. Rattan Chaudhry was appointed as IRP, later replaced by Mr. Subhash Kumar Kundra as RP. The company went into liquidation, with Mr. Kundra as Liquidator. The Liquidator filed an application (IA No. 3316 of 2020) alleging undervalued transactions. Classic Bottle Caps Private Limited, a manufacturer of aluminum closures, PVC shrink capsules, and flexible packaging, had a job work agreement with Metal Craft Bottle Seals LLP (Respondent No. 3). The Liquidator alleged that Rs. 69.93 lakhs from job work was paid into the personal accounts of the promoters/directors (Respondents No. 1, 2, and 4) instead of the company's account. The Respondents claimed the payments were for

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## Issues and analysis

### Issue 1: Whether the transactions between the Corporate Debtor and its related parties constitute …

**Ratio:** Section 45 of the IBC defines an undervalued transaction as one where the corporate

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**Reasoning:** The Adjudicating Authority reasoned that the job work revenue of Rs. 69.93 lakhs, which

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**Interpretation:** The interpretation of Section 45 and 3(27) of IBC is that the term 'asset'

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**Application:** The Adjudicating Authority applied this interpretation to the facts, finding

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** GAC Shipping…
- **Respondents:** Classic Bottle…

## Timeline

- **2019-04-01 — Job Work Agreement…**: The Corporate Debtor and Respondent No. 3 (Metal Craft Bottle Seals LLP) entered into an…
- **2020-02-13 — CIRP Initiati…**: CIRP was initiated against the Corporate Debtor, and Mr. Rattan Chaudhry was appointed as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 45 — Avoidance of undervalued transactions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-45)

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