# In the matter of Texas Textiles & Industries Limited IA (IB) No. 125-KB-2021 in CP (IB) No. 1385-KB-2018

> NCLT judgment dated 2022-09-05. Citation: TCN-2022-NCLT-01165. The case involves an application filed by the Resolution Professional (RP) seeking liquidation…

- **Court:** NCLT
- **Order date:** 5 Sept 2022
- **Citation:** TCN-2022-NCLT-01165
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/texas-textiles-industries-limited-ia-ib-no-125-kb-2021-in-cp-ib-no-1385-kb-2018-15b52d97

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) seeking liquidation of Texas Textiles and Industries Limited, the Corporate Debtor, with the approval of the Committee of Creditors (CoC). The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a petition filed by Dena Bank, the financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The RP was appointed, but the CIRP faced non-cooperation from the directors of the Corporate Debtor. An OTS settlement proposal was considered but failed. The CoC ultimately decided to liquidate the Corporate Debtor with 100% voting.

## Facts

Dena Bank, the financial creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Texas Textiles and Industries Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The CIRP commenced on June 19, 2019. Sanjai Kumar Gupta was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). Public announcement was made on June 22, 2019, inviting claims from creditors. The directors of the Corporate Debtor did not cooperate during the CIRP. An OTS settlement proposal was considered but failed. The 180-day CIRP period expired on December 16, 2019, and was extended. A CoC meeting on January 4, 2021, decided on liquidation due to the expiry of the CIRP period and the absence of a

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor under Section 33(2) of the …

**Ratio:** Section 33(2) of the Code allows the Adjudicating Authority to pass an order for

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**Reasoning:** The Committee of Creditors (CoC) approved the liquidation of the Corporate Debtor with

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

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**Application:** In this case, the CoC approved the liquidation with 100% voting. The CIRP

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## Parties

- **Judges:** Rohit K…; Balraj…; +1 more
- **Respondents:** Texas Textiles…

## Timeline

- **2019-06-19 — CIRP Init…**: The Adjudicating Authority directed the initiation of the Corporate Insolvency Resolution…
- **2019-06-22 — Public Annou…**: Public announcement was made in Financial Express and Aajkal newspapers, inviting claims…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12A — (1) Subject to sub](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12a)

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