# In the matter of Sanmati Distributors Private Limited

> NCLT judgment dated 2023-10-13. Citation: TCN-2023-NCLT-01229. The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Oct 2023
- **Citation:** TCN-2023-NCLT-01229
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sanmati-distributors-private-limited-1886d0ea

## Summary

### Background

The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rules, 2016, regarding the corporate insolvency resolution process (CIRP) of M/s. Sanmati Distributors Private Limited. The CIRP was initiated based on a petition filed by Arvinder Singh, an operational creditor, under Section 9 of the Code. The Resolution Professional (RP), Santanu Bhattacharjee, filed an application for the dissolution of the Corporate Debtor due to the non-availability of assets and funds to continue the liquidation process. The Committee of Creditors (CoC), consisting of the sole operational creditor, approved the decision to dissolve the Corporate Debtor without going through liquidation.

## Facts

M/s. Sanmati Distributors Private Limited, the Corporate Debtor, was undergoing Corporate Insolvency Resolution Process (CIRP) initiated by an operational creditor, Arvinder Singh. The company had no fixed assets, inventory, employees, or revenue and was non-operational for several years. Its bank accounts were inoperative. The Committee of Creditors (CoC), comprising only the operational creditor, decided not to pursue liquidation due to the lack of assets to cover liquidation costs. The Resolution Professional (RP), Santanu Bhattacharjee, filed an application for early dissolution of the Corporate Debtor. The CIRP costs were borne by the operational creditor. The RP realized a cash balance of Rs. 2,35,403.00 from the suspended board of directors. The 180-day CIRP

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, having no assets and being non-operational for several years, should …

**Ratio:** Rule 14 of the IBBI (Liquidation Process) Regulations, 2016 allows for early dissolution

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**Reasoning:** The Corporate Debtor has no assets, inventory, employees, or revenue and has been

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**Interpretation:** Rule 14 provides a mechanism for early dissolution when the liquidation process

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**Application:** In this case, the Corporate Debtor's lack of assets and non-operational status

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## Parties

- **Judges:** BIDISHA BA…; ARVIND DEVA…
- **Appellants:** Arvinder…
- **Respondents:** M/s. Sanmati…
- **Advocates:** Urmila Chak…; Saurav…

## Timeline

- **2022-04-27 — Order for Initiation of…**: The Adjudicating Authority passed an order for the initiation of the Corporate Insolvency…
- **2022-04-29 — Public Annou…**: Public announcement of the CIRP was made in “Financial Express” (English) and “Ekdin”…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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