# In the matter of Master Weavers Ethinics India Private Limited

> NCLT judgment dated 2023-05-22. Citation: TCN-2023-NCLT-03232. The case pertains to an application filed by the Resolution Professional (RP) under Section…

- **Court:** NCLT
- **Order date:** 22 May 2023
- **Citation:** TCN-2023-NCLT-03232
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/master-weavers-ethinics-india-private-limited-6aa31c41

## Summary

### Background

The case pertains to an application filed by the Resolution Professional (RP) under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking a direction from the NCLT for the Committee of Creditors (CoC) to pay the Corporate Insolvency Resolution Process (CIRP) expenses and the RP's fees. The CIRP was initiated following the admission of a petition under Section 7 of the IBC filed by a financial creditor, M/s India Resurgence ARC Private Limited. The RP was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. The CoC was reconstituted, and meetings were held to approve the RP's fees and out-of-pocket expenses. However, the CoC did not pay the CIRP expenses despite repeated follow-ups.

## Facts

The Resolution Professional (RP), Malireddy Ramana Reddy, filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking payment of Corporate Insolvency Resolution Process (CIRP) expenses and fees from the Committee of Creditors (CoC). The CIRP was initiated against Master Weaver Ethnics Private Limited based on a petition filed by India Resurgence ARC Private Limited under Section 7 of the IBC. The RP was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. Public announcement was made on 2022-04-10. The first CoC meeting was held on 2022-05-12, where the RP's fees and expenses were approved. The CoC was reconstituted, and subsequent meetings were held on 2022-02-25 and 2022-08-26 to

…

## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) is obligated to pay the Corporate Insolvency Resolution …

**Ratio:** The Insolvency and Bankruptcy Code (IBC), 2016, mandates that the CIRP expenses,

…

**Reasoning:** The court reasoned that the CoC benefits from the CIRP process, which aims to revive the

…

**Interpretation:** The IBC places a clear obligation on the CoC to ensure that the CIRP expenses

…

**Application:** In this case, the CoC was directed to pay the outstanding CIRP expenses and the

…

## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Malireddy Ramana…
- **Respondents:** MASTER WEAVER…; M/s. India…

## Timeline

- **2022-04-04 — Petition Ad…**: Tribunal admitted the petition under section 7 of IBC, 2016 filed by one of the Financial…
- **2022-04-10 — Public Annou…**: Applicant/RP issued Public Announcement in Form-A as per section 15 of IBC read with…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/master-weavers-ethinics-india-private-limited-6aa31c41