# In the matter of Sanmati Distributors Private Limited

> NCLT judgment dated 2023-10-13. Citation: TCN-2023-NCLT-01245. 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-01245
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sanmati-distributors-private-limited-72ddc0ca

## 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, for the dissolution of M/s. Sanmati Distributors Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a petition filed by Arvinder Singh (Operational Creditor) under Section 9 of the Code. Santanu Bhattacharjee was appointed as the Interim Resolution Professional (IRP). Public announcement was made as per regulations. The Committee of Creditors (CoC) was formed with Arvinder Singh as the sole member. The CoC decided not to issue Form G or appoint any transaction/forensic auditor due to the Corporate Debtor's lack of operations and

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## Facts

M/s. Sanmati Distributors Private Limited, the Corporate Debtor, faced Corporate Insolvency Resolution Process (CIRP) initiated by Operational Creditor, Arvinder Singh. The company had no fixed assets, inventory, employees, or revenue and was non-operational for several years. The bank accounts of the Corporate Debtor were inoperative, and all CIRP transactions were conducted through the Resolution Professional's (RP) personal account. The Committee of Creditors (CoC), consisting solely of the Operational Creditor, decided against liquidation due to the lack of assets and funds. Valuation reports indicated a liquidation value of Rs. 2,35,403.33, which was the cash balance realized from the suspended board of directors. The CIRP costs were borne by the Operational

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor should be dissolved given its lack of assets, non-operational status, …

**Ratio:** Section 54 of the Code and Rule 14 of the IBBI (Liquidation Process) Regulations, 2016,

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**Reasoning:** The Adjudicating Authority considered that the Corporate Debtor had no assets, was

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**Interpretation:** The provisions of the Code and Regulations allow for early dissolution when the

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case, noting

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## Parties

- **Judges:** BIDISHA BA…; ARVIND DEVA…
- **Appellants:** Arvinder…
- **Respondents:** Sanmati Distributo…

## Timeline

- **2022-04-27 — Order for Initiation of…**: Adjudicating Authority passed an order for initiation of Corporate Insolvency Resolution…
- **2022-04-29 — Public Annou…**: Public announcement in Form A was published in two newspapers, “Financial Express”…

## 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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