# In the matter of KSS Limited

> NCLT judgment dated 2025-03-24. Citation: TCN-2025-NCLT-00321. The case involves an application (I.A. No. 4/2024) filed in a corporate insolvency resolution…

- **Court:** NCLT
- **Order date:** 24 Mar 2025
- **Citation:** TCN-2025-NCLT-00321
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kss-limited-327174f8

## Summary

### Background

The case involves an application (I.A. No. 4/2024) filed in a corporate insolvency resolution process (CIRP) against KSS Limited ('Corporate Debtor'). The CIRP was initiated following a Company Petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) by Micro Capitals Private Limited, the Financial Creditor. Mr. Dharmendra Dhelariya was appointed as the Interim Resolution Professional (IRP). The Resolution Professional (RP) published an invitation for Expression of Interest (EOI) and received multiple EOIs, with Micro Capitals Private Limited submitting a Resolution Plan. The CoC approved the Resolution Plan with 77.97% voting share. The RP filed an application seeking approval of the Resolution Plan, which was objected to by the Commissioner of Income Tax

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## Facts

Micro Capitals Private Limited initiated CIRP against KSS Limited under Section 7 of IBC. Dharmendra Dhelariya was appointed as IRP. Public announcement was made on 2023-01-30. Claims of Rs. 95.59 Crores were received from Micro Capitals Private Limited and Axis Bank Limited. Micro Capitals Private Limited held 77.97% voting right, while Axis Bank Limited held 22.07%. Two registered valuers were appointed on 2023-02-28. Invitation for Expression of Interest (EOI) was published on 2023-03-25. Micro Capitals Private Limited submitted a Resolution Plan on 2023-06-14. The CoC decided to extend the CIRP period on 2023-07-19. The Corporate Debtor's premises were sealed by the Enforcement Directorate. The Resolution Plan was approved by 77.97% voting on 2023-10-17. A Letter

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## Issues and analysis

### Issue 1: Whether the Resolution Plan is in direct contravention of Section 30(2)(b) of the IBC by not being …

**Ratio:** Section 30(2), Explanation 1, of the IBC states that the distribution of payment to the

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**Reasoning:** The NCLT observed that the SRA, Micro Capitals Private Limited, is also the Dominant

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**Interpretation:** The distribution mechanism as proposed by the SRA is in accordance with the

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**Application:** The NCLT concluded that the distribution is based on voting share percentage of

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Dharmendra…
- **Respondents:** KSS Lim…; The Commissioner…

## Timeline

- **2023-01-24 — CIRP Init…**: Corporate Insolvency Resolution Process (‘CIRP') initiated against KSS Limited…
- **2023-01-30 — Public Annou…**: A public announcement was made on 30.01.2023 which was published in the newspapers,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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