# In the matter of Mystic Work Designs Pvt.  Ltd. IA (I.B.C)-5814(ND)-2021 in C.P. (IB) No. 3107-ND-2019

> NCLT judgment dated 2022-02-25. Citation: TCN-2022-NCLT-03969. The case involves an application under Section 54 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 25 Feb 2022
- **Citation:** TCN-2022-NCLT-03969
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mystic-work-designs-pvt-ltd-ia-ibc-5814nd-2021-in-cp-ib-no-3107-nd-2019-e0d02b0f

## Summary

### Background

The case involves an application under Section 54 of the Insolvency and Bankruptcy Code, 2016, seeking the dissolution of Mystic Monk Designs Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor following an application by an Operational Creditor. Mr. Pawan Kumar Garg was appointed as the Interim Resolution Professional (IRP). The Committee of Creditors (CoC) was formed with only one member, the Operational Creditor. The CoC noted that the Corporate Debtor had no revenue generation, physical assets, or possibility of revival. The CoC recommended proceeding with dissolution due to the high CIRP costs compared to the admitted claim and the negligible asset value of the Corporate Debtor.

## Facts

Kamiya & Co, the Operational Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Mystic Monk Designs Pvt. Ltd., the Corporate Debtor. The application was admitted, and Mr. Pawan Kumar Garg was appointed as the Interim Resolution Professional (IRP), later becoming the Resolution Professional (RP). The Committee of Creditors (CoC) consisted of only one member, the Operational Creditor. The Corporate Debtor had no revenue generation, physical assets, or possibility of revival. The only bank account of the Corporate Debtor was closed on 12.07.2021. The RP appointed two sets of valuers. The CoC determined that the CIRP costs were higher than the admitted claim and that the Corporate Debtor had negligible asset value. The CoC recommended proceeding

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the power to order early dissolution of the Corporate Debtor …

**Ratio:** Rule 11 of the NCLT Rules, 2016 grants the Adjudicating Authority inherent powers to

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**Reasoning:** The Adjudicating Authority noted that the Corporate Debtor had no assets to be liquidated

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**Interpretation:** The interpretation of Rule 11 and Regulation 14 allows the Adjudicating

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**Application:** In this case, the Corporate Debtor had no assets, and the CoC recommended

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; AVINASH K.…
- **Appellants:** Kamiya…
- **Respondents:** M/S MYSTIC MONK…

## Timeline

- **2019-01-01 — IB Petition…**: Main IB petition no. 3107/ND/2019 was filed by Operational Creditor for initiation of…
- **2021-08-24 — Application…**: The application was allowed vide order dated 24.08.2021 and Mr. Pawan Kumar Garg was…

## 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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