# In the matter of Sri Lakshmi Saraswathi Spintex Limited

> NCLT judgment dated 2024-01-19. Citation: TCN-2024-NCLT-02986. The case involves an application (IA(IBC)/2232(CHE)/2023) filed in connection with a corporate…

- **Court:** NCLT
- **Order date:** 19 Jan 2024
- **Citation:** TCN-2024-NCLT-02986
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-lakshmi-saraswathi-spintex-limited-73f00b3c

## Summary

### Background

The case involves an application (IA(IBC)/2232(CHE)/2023) filed in connection with a corporate insolvency resolution process (CIRP) initiated against M/s. Sri Lakshmi Saraswathi Spintex Limited. The CIRP was initiated via an order dated 15.06.2023. The Committee of Creditors (CoC) ultimately resolved to liquidate the Corporate Debtor due to the absence of any viable resolution plan. The Resolution Professional (RP) filed an application seeking liquidation of the Corporate Debtor.

## Facts

M/s. Sri Lakshmi Saraswathi Spintex Limited was admitted into Corporate Insolvency Resolution Process (CIRP) on 15.06.2023. Mr. CA. Mahalingam Suresh Kumar was appointed as the Interim Resolution Professional. The Corporate Debtor had no commercial operations for 3 years prior to the initiation of CIRP. An application under Section 19(2) of the code was filed against the Suspended Director. No Resolution Applicants responded to the EOI issued. The CoC decided not to extend the CIRP period and resolved to liquidate the Corporate Debtor with 100% voting on 03.11.2023. The RP collated claims from various stakeholders due to the absence of books of accounts. The Adjudicating Authority considered the decision taken by the CoC of the Corporate Debtor and ordered liquidation

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority should order the liquidation of the Corporate Debtor, M/s. Sri …

**Ratio:** The Adjudicating Authority has the power to order liquidation when the CoC decides to

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**Reasoning:** The CoC, after considering the status of the Corporate Debtor (inactive for more than 3

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**Interpretation:** Section 33 of the Insolvency and Bankruptcy Code, 2016 allows for liquidation

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**Application:** Given the CoC's decision and the absence of a resolution plan, the Adjudicating

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** CA Mahalingam…
- **Respondents:** Lakshmi Saraswathi…; IDBI Bank L…
- **Advocates:** A.G. Sathyanarayan…

## Timeline

- **2023-06-15 — CIRP Init…**: M/s. Sri Lakshmi Saraswathi Spintex Limited was admitted into Corporate Insolvency…
- **2023-06-17 — Public Annou…**: Publication of Public…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19(2) — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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