# 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-03000. The case pertains to the Corporate Insolvency Resolution Process (CIRP) initiated against…

- **Court:** NCLT
- **Order date:** 28 Apr 2022
- **Citation:** TCN-2022-NCLT-03000
- **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-923mb2020-9fab8056

## 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 National Company Law Tribunal (NCLT) on March 9, 2021. Following the admission, an Interim Resolution Professional (IRP) was appointed, who then made public announcements inviting 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. The IRP was appointed

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## Facts

On 2021-03-09, the NCLT admitted a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by Axis Bank Limited, initiating the Corporate Insolvency Resolution Process (CIRP) against Talwalkars Healthclubs Limited. An Interim Resolution Professional (IRP) was appointed, who invited claims from creditors and constituted a Committee of Creditors (CoC). Prior to the CIRP, a demerger scheme was approved on 2017-12-21, where Talwalkars Better Value Fitness Limited's (TBVFL) gym business was demerged into Talwalkars Healthclubs Limited. The IRP was appointed as the Resolution Professional (RP) on 2021-04-08. Due to non-cooperation from the erstwhile management, the RP filed an application seeking cooperation from the suspended Board of Directors and

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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 the fact that no resolution plan was received despite efforts to

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

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**Application:** Since no resolution plan was received and the CoC approved liquidation, the

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## Parties

- **Judges:** RAJESH S…; KISHORE VEMULAPALL…
- **Respondents:** Talwalkars…
- **Advocates:** Yashish C…; Ramakan…; +2 more

## Timeline

- **2017-12-21 — Demerger Scheme…**: A scheme of demerger was approved by the NCLT, where Talwalkars Better Value Fitness…
- **2021-03-09 — CIRP Init…**: The NCLT admitted a petition under Section 7 of the IBC filed by Axis Bank Limited,…

## 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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