# In the matter of Sri Lakshmi kanth Spinners Limited

> NCLT judgment dated 2024-04-18. Citation: TCN-2024-NCLT-01684. The case pertains to an application filed for the liquidation of Sri Lakshmi Kantha Spinners…

- **Court:** NCLT
- **Order date:** 18 Apr 2024
- **Citation:** TCN-2024-NCLT-01684
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-lakshmi-kanth-spinners-limited-703c62ee

## Summary

### Background

The case pertains to an application filed for the liquidation of Sri Lakshmi Kantha Spinners Ltd after the Corporate Insolvency Resolution Process (CIRP) failed to yield a resolution plan. The CIRP was initiated on 2019-08-01. Despite efforts by the Resolution Professional (RP) and the Committee of Creditors (CoC), the suspended directors of the company did not cooperate in providing necessary information. The RP published invitations for resolution plans, but none were received. The CoC ultimately recommended liquidation, leading to the application before the Adjudicating Authority.

## Facts

Sri Lakshmi Kantha Spinners Ltd was admitted into Corporate Insolvency Resolution Process (CIRP) on 2019-08-01. The Resolution Professional (RP) was appointed and made public announcements inviting claims from creditors. A Committee of Creditors (CoC) was formed. The RP requested information from the suspended directors and statutory auditor, but they did not provide it. The RP appointed a Transaction Auditor to audit transactions under Sections 43, 45, 50, and 66 of the IBC, but the necessary information was not provided. The RP published invitations for Expression of Interest (EoI) but received no resolution plans. ATA Agro Commodities Limited, holding 18.64% equity, provided a corporate guarantee to State Bank of India. The suspended directors failed to adhere to

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Sri Lakshmi Kantha Spinners Ltd, should be liquidated under Section …

**Ratio:** Section 33(1)(a) of the IBC 2016 allows the Adjudicating Authority to pass an order for

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**Reasoning:** The court reasoned that despite all possible steps taken during the CIRP, no viable

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**Interpretation:** Section 33(1)(a) is interpreted to mean that if the CIRP fails to produce a

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**Application:** The court applied Section 33(1)(a) to the facts of the case, noting that the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** State Bank of…
- **Respondents:** Lakshmikantha…

## Timeline

- **2019-08-01 — CIRP Init…**: Sri Lakshmi Kantha Spinners Ltd was admitted into Corporate Insolvency Resolution Process…
- **2019-08-09 — Public Annou…**: The Resolution Professional (RP) issued a public announcement inviting claims from…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(1) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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