# In the matter of Systems Technology Group (India) Private Limited

> NCLT judgment dated 2024-07-12. Citation: TCN-2024-NCLT-01011. The case pertains to a company petition filed by the liquidator for the voluntary liquidation…

- **Court:** NCLT
- **Order date:** 12 Jul 2024
- **Citation:** TCN-2024-NCLT-01011
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/systems-technology-group-india-private-limited-8eb82247

## Summary

### Background

The case pertains to a company petition filed by the liquidator for the voluntary liquidation of Systems Technology Group (India) Private Limited under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company was originally incorporated in 1998 and sought dissolution. An earlier attempt at voluntary liquidation was dismissed due to the company's insolvency. The company then addressed the issues raised in the previous dismissal, including converting debt owed to a promoter shareholder into equity shares to achieve solvency.

## Facts

Systems Technology Group (India) Private Limited sought voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company was incorporated on 09.12.1998 with the main object of developing computer software. The authorized share capital was Rs.1,30,00,000/-, and the issued paid-up capital was Rs.1,29,96,870/-. An earlier voluntary liquidation petition was dismissed because the company had existing debt of Rs.99,96,870/- towards its Director and was deemed insolvent. The company then held a board meeting on 17.10.2023 and an Extraordinary General Meeting on 03.11.2023 to re-initiate the voluntary liquidation process. To address the solvency issue, the company converted the debt owed to the promoter shareholder into equity shares. The

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## Issues and analysis

### Issue 1: Whether the company has rectified the deficiencies that led to the dismissal of its previous …

**Ratio:** The legal principle applied is that a company seeking voluntary liquidation must

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**Reasoning:** The court reasoned that the company had previously failed to demonstrate solvency due to

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**Interpretation:** This issue involves interpreting the requirements for voluntary liquidation

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**Application:** In this case, the company addressed the solvency issue by converting debt into

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** Shashikant…
- **Respondents:** Systems Technology…

## Timeline

- **1998-12-09 — Company Incor…**: Systems Technology Group (India) Private…
- **2022-02-23 — Company Discontinued…**: The company discontinued…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 59 — Voluntary liquidation of corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-59)

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