# In the matter of Shree Raghuvanshi Fibers Private Limited IA 776 OF 2021 in CP (IB) NO. 563-NCLT-AHM-2019

> NCLT judgment dated 2022-08-30. Citation: TCN-2022-NCLT-01221. The case pertains to an application filed by the Resolution Professional (RP) of Shree…

- **Court:** NCLT
- **Order date:** 30 Aug 2022
- **Citation:** TCN-2022-NCLT-01221
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-raghuvanshi-fibers-private-limited-ia-776-of-2021-in-cp-ib-no-563-nclt-ahm-742869a7

## Summary

### Background

The case pertains to an application filed by the Resolution Professional (RP) of Shree Raghuvanshi Fibers Private Limited under Section 33(2) read with 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking liquidation of the Corporate Debtor. The Corporate Insolvency Resolution Process (CIRP) was initiated based on an application filed by an Operational Creditor, Mansihbhai Baghabhai Aahir, under Section 9 of the IB Code. The application was admitted on 18.02.2020, and Mr. Divyang Pareshrai Majumdar was appointed as the Interim Resolution Professional (IRP). Mr. Majumdar later resigned due to health reasons, and Mr. Jaykumar Pesumal Arlani was appointed as the new IRP. The Committee of Creditors (CoC) was formed with Bank of Baroda as its sole member. The CoC was

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## Facts

Shree Raghuvanshi Fibers Private Limited faced Corporate Insolvency Resolution Process (CIRP) initiated by an Operational Creditor, Mansihbhai Baghabhai Aahir. The CIRP was triggered under Section 9 of the IB Code. The initial IRP, Mr. Divyang Pareshrai Majumdar, resigned due to health reasons and was replaced by Mr. Jaykumar Pesumal Arlani. Bank of Baroda was the sole member of the Committee of Creditors (CoC). The company had not conducted any production activities for 5-6 years and was deemed not a going concern. The CoC approved a resolution for liquidation with 100% votes. The company's last balance sheet filed with MCA was as of 31.03.2016. The company's main asset is a Cotton ginning production factory unit with land, building, and machinery, which is

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## Issues and analysis

### Issue 1: Whether the application for liquidation of Shree Raghuvanshi Fibers Private Limited under Section …

**Ratio:** Section 33(2) of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of

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**Reasoning:** The CoC, consisting of Bank of Baroda, approved the resolution for liquidation with 100%

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**Interpretation:** Section 33(2) provides a mechanism for the CoC to decide on the liquidation of

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**Application:** In this case, the CoC's approval, coupled with the fact that the company was

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Appellants:** JAIKUMAR PESUMAL…
- **Respondents:** Shree Raghuvanshi…

## Timeline

- **2019-01-01 — CP (IB) No. 563/NCLT/AHM…**: The Main Company Petition being CP (IB) No. 563 of 2019 was filed by Operational…
- **2020-02-18 — CIRP Application…**: The application for CIRP was admitted by the Adjudicating Authority vide its Order dated…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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