# In the matter of Hema Automotive Pvt. Ltd. I.A. 867-2023 in Company Petition No. (IB) – 822-(ND) -2021

> NCLT judgment dated 2023-04-11. Citation: TCN-2023-NCLT-03869. The case involves an application filed by the Resolution Professional under Section 33(2) of…

- **Court:** NCLT
- **Order date:** 11 Apr 2023
- **Citation:** TCN-2023-NCLT-03869
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hema-automotive-pvt-ltd-ia-867-2023-in-company-petition-no-ib-822-nd-2021-326438f9

## Summary

### Background

The case involves an application filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the Corporate Debtor, M/s. Hema Automotive Pvt. Ltd. The Operational Creditor had previously filed an application under Section 9 of the Code, which was admitted by the Tribunal on 08.07.2022, initiating the Corporate Insolvency Resolution Process (CIRP). The Committee of Creditors (CoC), consisting of sole Financial Creditor Hero Fincorp Limited, unanimously resolved to liquidate the Corporate Debtor. The Tribunal directed the CoC to reconsider the liquidation application, and the CoC reaffirmed its decision, citing that the Corporate Debtor had not been a Going Concern for the past two years

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## Facts

M/s. Five Ess Precision Components Pvt. Ltd., an Operational Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against M/s. Hema Automotive Pvt. Ltd., the Corporate Debtor, by filing an application under Section 9 of the Insolvency and Bankruptcy Code (IBC). The application was admitted on 08.07.2022. The Committee of Creditors (CoC), consisting solely of Hero Fincorp Limited (a Financial Creditor), unanimously resolved for the liquidation of the Corporate Debtor. This decision was made because the Corporate Debtor had not been a Going Concern for the last two years, and its machinery had already been realized by Hero Fincorp Ltd. under the SARFAESI Act, 2002. The Resolution Professional, Mr. Vivek Sharma, filed an application under Section 33(2) of

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## Issues and analysis

### Issue 1: Whether the Tribunal should approve the liquidation of the Corporate Debtor based on the unanimous …

**Ratio:** The IBC empowers the Committee of Creditors to liquidate the Corporate Debtor at any time

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**Reasoning:** The Tribunal relied on the NCLAT's order in Innovative Construventures Private Limited,

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**Interpretation:** Section 33(2) of the IBC, along with the explanation, provides a mechanism for

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**Application:** In this case, the CoC unanimously resolved to liquidate the Corporate Debtor

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## Parties

- **Judges:** BACHU VENKAT…; RAHUL BHA…
- **Appellants:** Vivek S…
- **Respondents:** M/s. Hema…; M/s. Five Ess…

## Timeline

- **2021-01-01 — Company Petiti…**: Company Petition No. (IB)…
- **2022-07-08 — CIRP Init…**: Tribunal admitted the application under Section 9, initiating CIRP against the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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