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

> NCLT judgment dated 2023-08-11. Citation: TCN-2023-NCLT-02059. R.N.C. Cotton Mills Pvt. Ltd. initiated a voluntary liquidation process under Section 59 of the…

- **Court:** NCLT
- **Order date:** 11 Aug 2023
- **Citation:** TCN-2023-NCLT-02059
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rnc-cotton-mills-pvt-ltd-af59d696

## Summary

### Background

R.N.C. Cotton Mills Pvt. Ltd. initiated a voluntary liquidation process under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company, incorporated in 1990, ceased its business activities and sought dissolution through its liquidator, Mr. Sandeep Kumar Jain. The company's directors declared solvency, stating no debts and no intention to defraud. The shareholders passed a special resolution in an Extra-Ordinary General Meeting (EGM) to liquidate the company voluntarily, appointing Mr. Sandeep Kumar Jain as the liquidator. The liquidator complied with IBBI regulations, notifying the Registrar of Companies and publishing notifications in newspapers to invite claims from stakeholders.

## Facts

R.N.C. Cotton Mills Pvt. Ltd., incorporated on 11.05.1990, initiated voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company's registered office is in Shriganganagar, Rajasthan. The authorized share capital is Rs. 10,00,000, and the paid-up share capital is Rs. 7,50,000. The company ceased business activities and had no prospects for future business. A Board resolution dated 09.04.2022 appointed Mr. Sandeep Kumar Jain as the liquidator. Directors filed affidavits declaring solvency on 19.05.2022. An Extra-Ordinary General Meeting (EGM) on 27.05.2022 passed a special resolution for voluntary liquidation. The liquidator notified the Registrar of Companies and published notifications in newspapers on 30.05.2022. A preliminary report

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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 court examined the submissions and documents, including the declaration of solvency,

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**Interpretation:** Section 59 provides a mechanism for corporate persons to voluntarily liquidate

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**Application:** The court found that R.N.C. Cotton Mills Pvt. Ltd. had met all the necessary

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## Parties

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

## Timeline

- **1990-05-11 — Company Incor…**: R.N.C. Cotton Mills Pvt. Ltd. was…
- **2022-04-09 — Board Reso…**: The Board of Directors passed a resolution for voluntary liquidation and appointed Mr.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 176 — Final dividend](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-176)

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