# In the matter of Talwalkars Healthclubs Ltd. IA-2930-2021 & IA-268-2022 in C.P. (IB)-923(MB)2020

> NCLT judgment dated 2022-04-28. Citation: TCN-2022-NCLT-02989. The case pertains to the Corporate Insolvency Resolution Process (CIRP) initiated against…

- **Court:** NCLT
- **Order date:** 28 Apr 2022
- **Citation:** TCN-2022-NCLT-02989
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/talwalkars-healthclubs-ltd-ia-2930-2021-ia-268-2022-in-cp-ib-923mb2020-744ab59f

## Summary

### Background

The case pertains to the Corporate Insolvency Resolution Process (CIRP) initiated against Talwalkars Healthclubs Limited, designated as the 'Corporate Debtor'. Axis Bank Limited, the 'Financial Creditor', filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), which was admitted by the NCLT on March 9, 2021. Following the admission, an Interim Resolution Professional (IRP) was appointed, who then made public announcements to invite claims from creditors. A Committee of Creditors (CoC) was constituted. Prior to the CIRP, a scheme of demerger was approved by the NCLT on December 21, 2017, where Talwalkars Better Value Fitness Limited's (TBVFL) gym business was demerged into the Corporate Debtor. Due to non-cooperation from the erstwhile management,

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## Facts

Axis Bank Limited initiated Corporate Insolvency Resolution Process (CIRP) against Talwalkars Healthclubs Limited by filing a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC). The petition was admitted on 09.03.2021. An Interim Resolution Professional (IRP) was appointed, who later became the Resolution Professional (RP). The IRP made public announcements to invite claims from creditors and constituted a Committee of Creditors (CoC). Prior to CIRP, Talwalkars Better Value Fitness Limited's (TBVFL) gym business was demerged into Talwalkars Healthclubs Limited via a scheme approved on 21.12.2017. The RP faced non-cooperation from the erstwhile management and filed an application seeking cooperation. An independent agency was appointed to ascertain

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## Issues and analysis

### Issue 1: Whether the application for liquidation of Talwalkars Healthclubs Limited should be allowed under …

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

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**Reasoning:** The court considered that no resolution plan was received from the prospective resolution

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**Interpretation:** Section 33(2) provides a clear pathway for liquidation when the CIRP process

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**Application:** In this case, the absence of a resolution plan and the CoC's decision to

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## Parties

- **Judges:** RAJESH S…; KISHORE VEMULAPALL…
- **Respondents:** Talwalkars…

## Timeline

- **2021-03-09 — Admission of Section 7…**: NCLT admitted the petition filed by Axis Bank Limited under Section 7 of the IBC,…
- **2017-12-21 — Approval of Demerger…**: NCLT approved a scheme of demerger where Talwalkars Better Value Fitness Limited's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 52 — Secured creditor in liquidation proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-52)

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