# In the matter of Prathvi Coal Private Limited IA-2783-2023 In IB –65(ND)-2020

> NCLT judgment dated 2023-06-09. Citation: TCN-2023-NCLT-03023. The application was filed by the Resolution Professional of M/s. Prathvi Coal Private Limited,…

- **Court:** NCLT
- **Order date:** 9 Jun 2023
- **Citation:** TCN-2023-NCLT-03023
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/prathvi-coal-private-limited-ia-2783-2023-in-ib-65nd-2020-11b4e659

## Summary

### Background

The application was filed by the Resolution Professional of M/s. Prathvi Coal Private Limited, seeking orders for dissolution of the Corporate Debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on 04.11.2022. Despite efforts, no resolution plan was received, and the Committee of Creditors (CoC) recommended dissolution due to the absence of assets and the inability to cover liquidation costs. The CIRP cost was largely borne by the Resolution Professional, and the Corporate Debtor's bank accounts have been closed due to nil balance.

## Facts

Mr. Ashutosh Gupta, an Operational Creditor, initiated CIRP against M/s. Prathvi Coal Private Limited, the Corporate Debtor. The Corporate Debtor was admitted into CIRP on 04.11.2022. Mr. Ranjan Chakraborti was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional. The Corporate Debtor's authorized share capital was Rs. 10,00,000, and the paid-up share capital was Rs. 2,50,000. The Corporate Debtor faced stiff competition and lacked funding, leading to its inability to pay financial dues. Public announcements were made, and a Committee of Creditors (CoC) was formed, consisting only of the Operational Creditor. No resolution applicant came forward. The CoC recommended liquidation, but due to a lack of assets and funds, the

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## Issues and analysis

### Issue 1: Whether the application for early/direct dissolution of the Corporate Debtor under Section 54 of …

**Ratio:** Section 54 of the Insolvency and Bankruptcy Code, 2016, allows for the dissolution of a

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**Reasoning:** The court reasoned that the affairs of the Corporate Debtor had been completely wound up,

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**Interpretation:** Section 54 provides a mechanism for dissolving a corporate debtor when there is

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**Application:** Given the Corporate Debtor's nil assets, lack of resolution plan, and the CoC's

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** ASHUTOSH…
- **Respondents:** M/s. PRATHVI COAL…

## Timeline

- **2022-11-04 — Admission in…**: The Corporate Debtor was admitted into…
- **2022-11-05 — Public Annou…**: Public announcement was made…

## 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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