# 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-03842. 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-03842
- **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-2018-811e2c12

## 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). The applicant sought to set aside the liquidator's rejection of a Scheme of Arrangement/Compromise proposed by the applicant to revive the Corporate Debtor, which was ordered for liquidation on 27.07.2020. The applicant also sought to set aside an auction notice issued by the liquidator for the sale of the Corporate Debtor's assets. The liquidator rejected the scheme on the grounds that the 90-day period from the date of liquidation had already passed.

## Facts

A. Pitchai, a shareholder of Krishna Industrial Corporation Limited, filed an application (CP/2/2021) seeking to revive the Corporate Debtor after it was ordered for liquidation on 2020-07-27. Pitchai proposed a Scheme of Arrangement/Compromise under Section 230 of the Companies Act, 2013, which was submitted to the liquidator on 2020-12-31. The liquidator rejected the scheme, citing that the 90-day period from the date of liquidation had passed. The applicant claimed they were unaware of the liquidation proceedings until November 2020 and were unable to present the scheme within the 90-day period due to the pandemic. The liquidator also intended to sell the Corporate Debtor's assets via auction proceedings scheduled for 2021-02-03. The Stakeholders Consultation

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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 stakeholders had already decided to proceed with the

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**Interpretation:** The interpretation is that the liquidator has a duty to proceed with the

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**Application:** In this case, the applicant submitted the scheme after the 90-day period from

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## Parties

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

## Timeline

- **2020-07-27 — Liquidation…**: Krishna Industrial Corporation Limited was…
- **2020-11-17 — Stakeholders Consultatio…**: Stakeholders Consultation Committee meeting was held, where the applicant participated.…

## 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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