# In the matter of Shamken Spinner Limited IA NO.178-2022 in CP (IB) NO.131-ALD-2017

> NCLT judgment dated 2023-06-01. Citation: TCN-2023-NCLT-03108. The case pertains to IA No.178/2022 in CP (IB) No.131/ALD/2017 before the National Company Law…

- **Court:** NCLT
- **Order date:** 1 Jun 2023
- **Citation:** TCN-2023-NCLT-03108
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shamken-spinner-limited-ia-no178-2022-in-cp-ib-no131-ald-2017-08c861b1

## Summary

### Background

The case pertains to IA No.178/2022 in CP (IB) No.131/ALD/2017 before the National Company Law Tribunal (NCLT), Allahabad Bench, Prayagraj. The application was filed by the Liquidator of Shamken Spinners Limited, seeking approval for the implementation of the sale of the Corporate Debtor as a going concern. The Corporate Debtor, Shamken Spinners Limited, was admitted into Corporate Insolvency Resolution Process (CIRP) based on a Section 7 petition filed by Asset Reconstruction Company India Limited. Subsequently, the Committee of Creditors (CoC) resolved to liquidate the Corporate Debtor after resolution plans failed. Mr. Sanjay Gupta was appointed as the Liquidator. The Tribunal directed the Liquidator to first attempt a compromise or arrangement under Section 230 of

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## Facts

1. Shamken Spinners Limited was undergoing Corporate Insolvency Resolution Process (CIRP) after a Section 7 petition was filed by Asset Reconstruction Company India Limited.
2. The Committee of Creditors (CoC) rejected the resolution plan and decided to liquidate the Corporate Debtor.
3. Mr. Sanjay Gupta was appointed as the Liquidator.
4. The Tribunal directed the Liquidator to first attempt a compromise or arrangement under Section 230 of the Companies Act, 2013.
5. The Liquidator published Expression of Interest (EOI) and invited bids for the sale of the Corporate Debtor as a going concern.
6. Sujeet Motors (P) Limited emerged as the highest bidder with a bid of Rs.41.05 Crores.
7. The E-auction process stipulated that the sale would be on an “as is where is”, “as is what

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## Issues and analysis

### Issue 1: Whether the sale of the Corporate Debtor as a 'going concern' during liquidation is permissible …

**Ratio:** Regulation 32 of the Liquidation Process Regulations allows the Liquidator to sell the

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**Reasoning:** The Tribunal considered the provisions of the IBC and the Liquidation Process

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**Interpretation:** The 'going concern' sale is interpreted as a sale where the Corporate Debtor's

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**Application:** In this case, the Tribunal applied the ratio to the facts and held that there

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Sanjay…
- **Respondents:** SHAMKEN SPINNERS…; Sujeet Motors (P)…

## Timeline

- **2017-01-01 — Initiation…**: CP (IB) No.131/ALD/2017…
- **2018-05-29 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35(1) — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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