# In the matter of R.N.C. Cotton Mills Pvt. Ltd.

> NCLT judgment dated 2023-08-11. Citation: TCN-2023-NCLT-02029. R.N.C. Cotton Mills Pvt. Ltd. filed an application through its liquidator, Sandeep Kumar Jain,…

- **Court:** NCLT
- **Order date:** 11 Aug 2023
- **Citation:** TCN-2023-NCLT-02029
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rnc-cotton-mills-pvt-ltd-9b8fbfc3

## Summary

### Background

R.N.C. Cotton Mills Pvt. Ltd. filed an application through its liquidator, Sandeep Kumar Jain, seeking dissolution via voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016, read with the IBBI Regulations, 2017. The company, incorporated on 11.05.1990, ceased business activities and had no prospects for future operations, leading the management to opt for voluntary liquidation. A board resolution was passed on 09.04.2022, appointing Sandeep Kumar Jain as the liquidator. The directors filed affidavits declaring the company's solvency, stating no debts and no intention to defraud. An Extra-Ordinary General Meeting (EGM) was held on 27.05.2022, where members unanimously voted for liquidation, and Sandeep Kumar Jain was appointed as the

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## Facts

R.N.C. Cotton Mills Pvt. Ltd., incorporated on 11.05.1990, sought voluntary liquidation due to ceasing business activities and lacking future prospects. The company's registered office is in District Shriganganagar. The authorized share capital is Rs. 10,00,000, and the paid-up share capital is Rs. 7,50,000. The Board of Directors passed a resolution on 09.04.2022 for voluntary liquidation, appointing Sandeep Kumar Jain as the liquidator. Directors filed affidavits declaring solvency, stating no debts and no intention to defraud. An EGM on 27.05.2022 unanimously approved liquidation, appointing Sandeep Kumar Jain as the liquidator. The liquidator notified the Registrar of Companies and published notifications in 'The Indian Express' and 'Jansatta' on 30.05.2022. A

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## Issues and analysis

### Issue 1: Whether the application for voluntary liquidation of R.N.C. Cotton Mills Pvt. Ltd. under Section 59 …

**Ratio:** Section 59 of the Insolvency and Bankruptcy Code, 2016, allows for voluntary liquidation

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**Reasoning:** The Adjudicating Authority considered the submissions and documents, finding that the

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**Interpretation:** Section 59 provides a mechanism for a solvent company to voluntarily liquidate

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**Application:** The court applied Section 59 to the facts, noting that the company had ceased

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## Parties

- **Judges:** Deep Chandr…; ATUL CHAT…
- **Appellants:** Sandeep Kum…
- **Respondents:** R.N.C. COTTON…

## Timeline

- **1990-05-11 — Company Incor…**: R.N.C. Cotton Mills Pvt. Ltd.…
- **2022-04-09 — Board Reso…**: Board of Directors passed a resolution for Voluntary Liquidation of the Company and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 59 — Voluntary liquidation of corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-59)

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