# In the matter of Paramex Transformers Limited I.A. No. 5965-(ND)-2021 Connected with IB-1125-(ND)-2019

> NCLT judgment dated 2022-02-11. Citation: TCN-2022-NCLT-04161. The case involves an application filed by Mr. Sumit Shukla, the Resolution Professional (RP) of…

- **Court:** NCLT
- **Order date:** 11 Feb 2022
- **Citation:** TCN-2022-NCLT-04161
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/paramex-transformers-limited-ia-no-5965-nd-2021-connected-with-ib-1125-nd-2019-ac621877

## Summary

### Background

The case involves an application filed by Mr. Sumit Shukla, the Resolution Professional (RP) of the Corporate Debtor 'M/s Paramex Transformers Limited', seeking liquidation of the Corporate Debtor under section 33(2) of the Insolvency and Bankruptcy Code, 2016. The application was prompted by the inability to formulate a resolution plan due to non-cooperation from the suspended directors of the Corporate Debtor, and the expiry of the CIRP timeline. An application under section 9 of the IBC, 2016 was filed by the Operational Creditor 'M/s Santosh Associates' against the Corporate Debtor 'M/s Paramex Transformers Limited'. The Tribunal admitted the application on 26.11.2019 and appointed Ms. Pooja Berry as the IRP. Later, on 17.06.2019, Mr. Rajeev Lochan was appointed as

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## Facts

M/s Santosh Associates, an Operational Creditor, initiated CIRP against Paramex Transformers Limited by filing an application under Section 9 of the IBC, 2016. The application was admitted on 26.11.2019. Ms. Pooja Berry was initially appointed as the IRP, later replaced by Mr. Rajeev Lochan. The IRP made a public announcement on 23.06.2020, calling for creditors to submit their claims. The IRP could not constitute a COC within the stipulated timeline due to non-receipt of claims. A claim was received from a secured Financial Creditor on 31.07.2020. The first COC meeting was held on 18.08.2020, where Punjab National Bank, the sole COC member, appointed Mr. Sumit Shukla as the Resolution Professional (RP). The RP filed IA No. 3644/2020, and the Tribunal appointed him on

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## Issues and analysis

### Issue 1: Whether the COC was justified in approving the …

**Ratio:** Section 33(2) of the Insolvency and Bankruptcy Code, 2016 empowers the COC to decide on

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**Reasoning:** The COC, consisting of a sole member, approved the liquidation after exploring all

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**Interpretation:** The COC's decision to liquidate the Corporate Debtor is valid under Section

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**Application:** In this case, the COC approved the liquidation in its 6th meeting on

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## Parties

- **Judges:** SH. P.S.N.…; SH. RAHUL…
- **Appellants:** M/s. Santosh…
- **Respondents:** Paramex Transforme…

## Timeline

- **2019-11-26 — CIRP Init…**: Application under Section 9 of IBC, 2016 filed by M/s Santosh Associates admitted; Ms.…
- **2019-06-17 — IRP Repla…**: Mr. Rajeev Lochan appointed as Interim…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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