# In the matter of Prapti Fashions Private Limited

> NCLT judgment dated 2024-12-13. Citation: TCN-2024-NCLT-00055. The case involves an application filed under Section 33 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Dec 2024
- **Citation:** TCN-2024-NCLT-00055
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/prapti-fashions-private-limited-d1efaca3

## Summary

### Background

The case involves an application filed under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Resolution Professional (RP) of Prapti Fashions Private Ltd., the Corporate Debtor, seeking initiation of the liquidation process. The CIRP was initiated against Prapti Fashions Private Limited on 18/10/2022, following a petition filed under Section 7 of the IBC. The RP faced difficulties, including non-cooperation from the Kolkata Municipal Corporation (KMC) and the suspended directors of the Corporate Debtor. An application for extension of time for the CIRP was allowed on 05/10/2023. Despite efforts, the CoC did not approve any resolution plan, and the last date of CIRP, 15th November, 2023, had passed.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against Prapti Fashions Private Limited on 18/10/2022, following a petition filed under Section 7 of the IBC. Ms. Meera Prasad was appointed as the Interim Resolution Professional (IRP). The Resolution Professional (RP) faced challenges, including the registered office being locked and sealed by the Kolkata Municipal Corporation (KMC), and non-cooperation from the suspended directors of the Corporate Debtor, who concealed information about transactions and bank accounts. An application for extension of time for the CIRP was allowed on 05/10/2023. The RP issued an invitation for expression of interest, and one prospective Resolution Applicant, Devdarshan Designs Private Limited, submitted a resolution plan

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority is mandated to order liquidation of the Corporate Debtor under …

**Ratio:** Section 33(1)(a) of the IBC mandates that the Adjudicating Authority shall pass an order

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**Reasoning:** The Adjudicating Authority reasoned that since no resolution plan was approved by the CoC

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**Interpretation:** Section 33 of the IBC is interpreted to mean that if the CIRP fails to produce

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**Application:** In this case, the Resolution Professional submitted that no resolution plan was

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Respondents:** Prapti Fashions…
- **Advocates:** Rachit La…; Pooja…; +1 more

## Timeline

- **2022-10-18 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against Prapti Fashions Private…
- **2023-05-16 — CIRP Exte…**: CIRP period extended by the…

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