# In the matter of Savute Textiles Private Limited

> NCLT judgment dated 2023-07-06. Citation: TCN-2023-NCLT-02630. The case involves an application filed by the Resolution Professional (RP) of Savute Textiles…

- **Court:** NCLT
- **Order date:** 6 Jul 2023
- **Citation:** TCN-2023-NCLT-02630
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/savute-textiles-private-limited-175eeb13

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Savute Textiles Private Limited, Mr. K. Easwara Pillai, regarding the Corporate Insolvency Resolution Process (CIRP) of the company. The CIRP was initiated on 11.03.2022. Mr. Babu Abraham Kallivayail was initially appointed as the Interim Resolution Professional (IRP) but was later replaced by Mr. K. Easwara Pillai. The IRP allegedly did not perform his duties adequately, leading to delays and complications in the CIRP. The CoC decided to liquidate the assets of the corporate debtor.

## Facts

The Corporate Insolvency Resolution Process (CIRP) against Savute Textiles Private Limited was initiated on 11.03.2022. Mr. Babu Abraham Kallivayail was appointed as the Interim Resolution Professional (IRP), who was later replaced by Mr. K. Easwara Pillai as the Resolution Professional (RP). The IRP allegedly did not perform his duties, including appointing a valuer, preparing an information memorandum, and filing applications for preferential/avoidance/fraudulent transactions. The RP faced challenges in taking control of the corporate debtor's assets and found that the corporate debtor was actively engaged in manufacturing. The CIRP period was extended, and the RP received expressions of interest and two resolution plans. However, the Committee of Creditors (CoC)

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## Issues and analysis

### Issue 1: Whether the liquidation of the Corporate Debtor, Savute Textiles Private Limited, is warranted …

**Ratio:** Section 33(2) of the IBC, 2016, allows the Adjudicating Authority to order the

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**Reasoning:** The CoC rejected both resolution plans submitted, and the CIRP period had already crossed

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**Interpretation:** Section 33(2) provides a clear pathway for liquidation when resolution efforts

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**Application:** Since the CoC rejected the resolution plans and the CIRP period had expired,

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** K. EASWARA…
- **Respondents:** Savute Textiles…; Sulpa Internationa…

## Timeline

- **2022-03-11 — CIRP Init…**: CIRP against the corporate debtor was…
- **2022-03-19 — Public Annou…**: IRP effected public announcement in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52 — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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