# In the matter of Krishna Industrial Corporation Limited CP-2-2021 in CP-1053-IB-2018

> NCLT judgment dated 2022-03-08. Citation: TCN-2022-NCLT-03833. The case involves an application (CP/2/2021) filed under Section 60(5) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 8 Mar 2022
- **Citation:** TCN-2022-NCLT-03833
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/krishna-industrial-corporation-limited-cp-2-2021-in-cp-1053-ib-2018-6845bb52

## Summary

### Background

The case involves an application (CP/2/2021) filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by A. Pitchai, a shareholder of Krishna Industrial Corporation Limited (Corporate Debtor), seeking to set aside the liquidator's rejection of a Scheme of Arrangement/Compromise. The Corporate Debtor was ordered for liquidation on 27.07.2020. The applicant intended to take over the Corporate Debtor by proposing a Scheme of Arrangement/Compromise under Section 230 of the Companies Act, 2013. The liquidator refused to accept the scheme, citing that the 90-day period from the date of liquidation had already passed. The applicant also sought to set aside an auction notice issued by the liquidator for the sale of the Corporate Debtor's assets.

## Facts

A. Pitchai, a shareholder of Krishna Industrial Corporation Limited, filed an application (CP/2/2021) seeking to set aside the liquidator's rejection of a Scheme of Arrangement/Compromise. Krishna Industrial Corporation Limited was ordered for liquidation on 27.07.2020. The applicant intended to take over the Corporate Debtor by proposing a Scheme of Arrangement/Compromise under Section 230 of the Companies Act, 2013. The liquidator refused to accept the scheme, citing that the 90-day period from the date of liquidation had already passed. The applicant claimed they were unaware of the liquidation proceedings until recently due to the pandemic. The liquidator informed the applicant that the assets of the Corporate Debtor were proposed to be sold by way of auction

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## Issues and analysis

### Issue 1: Whether the Liquidator was justified in rejecting the Scheme of Arrangement/Compromise proposed by …

**Ratio:** The liquidator is justified in rejecting a Scheme of Arrangement/Compromise if it is not

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**Reasoning:** The court reasoned that the scheme had already been considered and rejected by a major

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**Interpretation:** This interpretation emphasizes the importance of stakeholder consensus and the

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**Application:** In this case, the court applied the ratio to the facts by noting that a major

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## Parties

- **Judges:** R. Sucha…; SAMEER…
- **Appellants:** A. Pit…
- **Respondents:** Krishna Industrial…; S. RAJE…

## Timeline

- **2020-07-27 — Liquidation…**: Corporate Debtor was ordered for…
- **2020-11-01 — Applicant's A…**: Applicant claimed to have become aware of the…

## 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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