# In the matter of Megafin Securities Limited

> NCLT judgment dated 2024-01-09. Citation: TCN-2024-NCLT-03227. The case pertains to an application filed by the Resolution Professional under Section 54(1) of…

- **Court:** NCLT
- **Order date:** 9 Jan 2024
- **Citation:** TCN-2024-NCLT-03227
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/megafin-securities-limited-6f39eac0

## Summary

### Background

The case pertains to an application filed by the Resolution Professional under Section 54(1) of the Insolvency and Bankruptcy Code, 2016, seeking the liquidation and dissolution of the Corporate Debtor, M/s Megafin Securities Limited. The application was filed due to the absence of assets and business operations in the Corporate Debtor, and the Committee of Creditors (CoC) deemed the continuation of the Corporate Insolvency Resolution Process (CIRP) as burdensome. The CIRP was initiated following orders from the Tribunal on 2023-04-11, which also appointed the applicant as the Interim Resolution Professional (IRP) and declared a moratorium. Public announcements were made on 2023-04-15 in several newspapers. The IRP constituted the CoC based on claims received under

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## Facts

M/s Megafin Securities Limited underwent Corporate Insolvency Resolution Process (CIRP). Indian Overseas Bank Asset Recovery Management Branch is the Financial Creditor. The CIRP was initiated by orders of the Tribunal on 2023-04-11. The applicant was appointed as the Interim Resolution Professional (IRP). A moratorium was declared, and public announcements were made on 2023-04-15 in Financial Express, Mana Telangana, and Prajasakthi Telugu Newspapers. The IRP constituted the Committee of Creditors (CoC). The total assets of the company were reported as Rs. 2,00,000/- as per audited financials for the year 2022, but provisional financials as of 2023-04-11 showed the assets as zero. The suspended Director informed that the Company is Corporate Guarantor to M/s Blossom

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## Issues and analysis

### Issue 1: Whether the Corporate …

**Ratio:** Section 54 of the IBC lays down the criteria for the dissolution of the Corporate Debtor.

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**Reasoning:** The Tribunal considered the fact that the CoC had taken a decision with 100% voting to

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**Interpretation:** Section 54 of the IBC provides the legal framework for the dissolution of a

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**Application:** In this specific case, the CoC determined that there were no assets to

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Indian Overseas…
- **Respondents:** Megafin Securities…

## Timeline

- **2023-04-11 — Tribunal…**: Tribunal issued orders initiating CIRP and appointing the applicant as the Interim…
- **2023-04-15 — Public Annou…**: Public announcements were made in Financial Express, Mana Telangana, and Prajasakthi…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 54 — Dissolution of corporate debtor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-54)

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