# In the matter of Shamken Multifab Limited

> NCLT judgment dated 2024-02-02. Citation: TCN-2024-NCLT-02803. The case involves an application filed by Shree Krishna Recycling India Private Limited, the…

- **Court:** NCLT
- **Order date:** 2 Feb 2024
- **Citation:** TCN-2024-NCLT-02803
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shamken-multifab-limited-d93d8950

## Summary

### Background

The case involves an application filed by Shree Krishna Recycling India Private Limited, the successful bidder, seeking permission to convert the sale of the corporate debtor, Shamken Multifab Limited, from a 'going concern' basis to a 'slump sale' basis. The initial corporate insolvency resolution process (CIRP) was initiated following an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) by a financial creditor. Subsequently, due to the lack of a viable resolution plan, a liquidation process was initiated. The liquidator attempted to sell the corporate debtor as a going concern, and Shree Krishna Recycling India Private Limited emerged as the highest bidder. However, the applicant faced difficulties due to the obsolescence of machinery,

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## Facts

1. An application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the NCLT Rules, 2016.
2. Shree Krishna Recycling India Private Limited was the successful bidder in the liquidation process of Shamken Multifab Limited.
3. The applicant sought permission to convert the sale of the corporate debtor from a 'going concern' basis to a 'slump sale' basis.
4. The initial CIRP was initiated under Section 7 of the IBC, followed by a liquidation process under Section 33 of the IBC.
5. The corporate debtor's operations had been shut down for six years, and the plant and machinery were obsolete.
6. A portion of the corporate debtor's premises was situated on land belonging to a third party, creating a discrepancy in land ownership.
7. The

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## Issues and analysis

### Issue 1: Whether the sale of the Corporate Debtor can be converted from a 'going concern' basis to a 'slump …

**Ratio:** The legal principle applied is based on Regulation 32(b) of the IBBI (Liquidation

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**Reasoning:** The court reasoned that the operational and legal challenges, including the obsolescence

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**Interpretation:** The interpretation involves understanding the scope and applicability of

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**Application:** The ratio and reasoning were applied to the specific facts of the case,

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Shree Krishna…
- **Respondents:** Shamken Multifab…; Sanjay…
- **Advocates:** Virender…; Vishal…; +5 more

## Timeline

- **2018-05-29 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against Shamken Multifab…
- **2023-06-01 — Liquidation…**: Liquidation process was ordered to be…

## 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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