# 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-02992. 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-02992
- **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-2020-7570031a

## Summary

### Background

The application was filed by the Resolution Professional of M/s. Prathvi Coal Private Limited, seeking orders for the dissolution of the Corporate Debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor was admitted into CIRP on 04.11.2022. Despite efforts, no resolution plan was received, and the CoC recommended dissolution due to the absence of assets and the inability to cover liquidation costs. The Operational Creditor is the sole member of the CoC and has contributed to the CIRP costs. The Corporate Debtor's financial situation was dire, with minimal cash balance and closed bank accounts. The CIRP period was expiring on 03.05.2023.

## Facts

Mr. Ashutosh Gupta, an Operational Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against M/s. Prathvi Coal Private Limited. 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 main business was manufacturing, buying, selling, importing, exporting, and trading in minerals and related products. The Corporate Debtor faced stiff competition and lacked funding, leading to its inability to pay financial dues. A public announcement was made on 05.11.2022, and a Committee of Creditors (CoC) was formed, consisting only of the Operational Creditor. The Income Tax Department's claim was rejected due to

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## Issues and analysis

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

**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

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**Application:** The court applied Section 54 to the facts of the case, noting that the

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## Parties

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

## Timeline

- **2022-11-04 — Admission in…**: The Adjudicating Authority admitted the Corporate Debtor into Corporate Insolvency…
- **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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