# In the matter of Shamken Spinner Limited IA NO.337-2022 in CP (IB) NO.131-ALD-2017

> NCLT judgment dated 2023-06-01. Citation: TCN-2023-NCLT-03106. This is a case regarding IA No.337/2022 in CP (IB) No.131/ALD/2017 before the National Company…

- **Court:** NCLT
- **Order date:** 1 Jun 2023
- **Citation:** TCN-2023-NCLT-03106
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shamken-spinner-limited-ia-no337-2022-in-cp-ib-no131-ald-2017-4beb33e1

## Summary

### Background

This is a case regarding IA No.337/2022 in CP (IB) No.131/ALD/2017 before the National Company Law Tribunal (NCLT), Allahabad Bench, Prayagraj. The application was filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016, seeking to declare a sale notice dated 02.03.2022 issued by the Liquidator as null and void, along with all auction processes conducted under it. The applicant, an ex-director/shareholder of the Corporate Debtor, challenged the sale, alleging non-compliance with prior Tribunal orders. The Liquidator argued that the sale was conducted in compliance with liquidation orders and after attempts to transfer the Corporate Debtor as a going concern failed. The NCLAT had previously dismissed appeals challenging the liquidation order.

## Facts

The Corporate Debtor, Shamken Spinners Limited, was undergoing liquidation. An admission order was passed on 29.05.2018 in a petition filed U/s 7. The Tribunal ordered liquidation on 26.10.2021. The Tribunal directed the Liquidator to first attempt to transfer the Corporate Debtor through a compromise or arrangement under Regulation 2B of the Liquidation Process Regulations, and then to sell it as a going concern. The Liquidator invited an Expression of Interest (EOI) under Section 230 of the Companies Act, but received no response. The Liquidator then proceeded with an e-auction, setting a reserve price of Rs.22 Crore. The auction was conducted on 31.03.2022, and Sujeet Motors (P) Limited was declared the highest bidder (H1) with a bid of Rs.41.05 Crores. The

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## Issues and analysis

### Issue 1: Whether the sale notice dated 02.03.2022 issued by …

**Ratio:** The ratio is based on the compliance with the liquidation process and the orders of the

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**Reasoning:** The Tribunal found that the Liquidator had followed the necessary procedures, including

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**Interpretation:** The interpretation focuses on the Liquidator's duty to comply with the IBC and

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**Application:** The Tribunal applied the ratio to the facts by examining the Liquidator's

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Sanjay Chat…
- **Respondents:** SHAMKEN SPINNERS…; Sanjay…

## Timeline

- **2018-05-29 — Admission…**: An admission order was passed…
- **2021-10-26 — Liquidation…**: The Tribunal passed an order for…

## 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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