# In the matter of Lotus Auto Engineering Private Limited IA-3162 & 3837-2021 in CP (IB)-31(PB)-2018

> NCLT judgment dated 2022-09-07. Citation: TCN-2022-NCLT-01139. The case involves two applications, IA-3162/2021 and IA-3837/2021, related to the liquidation…

- **Court:** NCLT
- **Order date:** 7 Sept 2022
- **Citation:** TCN-2022-NCLT-01139
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lotus-auto-engineering-private-limited-ia-3162-3837-2021-in-cp-ib-31pb-2018-006e0b96

## Summary

### Background

The case involves two applications, IA-3162/2021 and IA-3837/2021, related to the liquidation of Lotus Auto Engineering Limited. IA-3162/2021 was filed by the liquidator, Ashok Kumar Gulla, seeking confirmation of the sale of the Corporate Debtor as a going concern, exclusion of a time period due to government-imposed lockdown, waiver of interest on delayed payment of sale consideration, and other reliefs. IA-3837/2021 was filed by the successful bidder, Deepak Industries Limited, seeking similar reliefs. The CIRP was initiated on 07.08.2018, and liquidation was ordered on 01.06.2020. The liquidator attempted to sell the Corporate Debtor as a going concern, leading to multiple e-auctions. Deepak Industries Limited was declared the successful bidder in the third

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## Facts

The Corporate Debtor, Lotus Auto Engineering Limited, underwent Corporate Insolvency Resolution Process (CIRP) initiated on 07.08.2018. The CIRP period ended on 15.11.2019. Liquidation was ordered on 01.06.2020, and Ashok Kumar Gulla was appointed as the Liquidator on 12.06.2020. The liquidator attempted to sell the Corporate Debtor as a going concern, inviting schemes of compromise and arrangement. An offer from IndoFarm Equipment Ltd was found ineligible under Section 29A of the IBC. Multiple e-auctions were conducted. Deepak Industries Limited submitted an EMD of Rs. 5.70 Crores and was declared the successful bidder in the third e-auction with a bid of Rs. 38 Crore. The Liquidator issued a Letter of Intent (LoI) on 07.04.2021. The successful bidder remitted the

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## Issues and analysis

### Issue 1: Whether the sale of the Corporate Debtor as a going …

**Ratio:** The sale of a corporate debtor as a going concern is permissible under the Insolvency and

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**Reasoning:** The court considered the submissions and documents presented, including the eligibility

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**Interpretation:** The scheme of sale as a going concern under the Code encompasses the idea that

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**Application:** The court allowed the prayer, confirming the sale of the Corporate Debtor as a

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## Parties

- **Judges:** Ramalingam…; Sh. Avinash K.…
- **Appellants:** Punjab National…
- **Respondents:** LOTUS AUTO…

## Timeline

- **2018-08-07 — CIRP Init…**: CIRP was initiated against…
- **2019-11-15 — End of CIRP…**: The CIRP period 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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