# In the matter of Varnika Industries Private Limited IA No. 264 of 2020 in CP(IB)No. 229-9-HDB-2019

> NCLT judgment dated 2022-04-01. Citation: TCN-2022-NCLT-03442. The case involves an application filed by the Resolution Professional (RP) of Varnika…

- **Court:** NCLT
- **Order date:** 1 Apr 2022
- **Citation:** TCN-2022-NCLT-03442
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/varnika-industries-private-limited-ia-no-264-of-2020-in-cpibno-229-9-hdb-2019-0f620b3b

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Varnika Industries Private Limited under Section 33(1)(a) of the Insolvency & Bankruptcy Code, 2016, seeking liquidation of the Corporate Debtor. The Corporate Insolvency Resolution Process (CIRP) was initiated following a petition filed by Servel Electronics Pvt. Ltd under Section 9 of the IBC, 2016, which was admitted on 2019-07-04. The Applicant was appointed as Interim Resolution Professional (IRP) and continued as Resolution Professional. Due to the absence of claims received after a public announcement on 2019-07-17, the CoC was constituted with only one operational creditor, Servel Electronics Pvt. Ltd. The CoC resolved to seek liquidation after the CIRP period, without inviting

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## Facts

Servel Electronics Pvt. Ltd initiated CIRP against Varnika Industries Private Limited under Section 9 of IBC, 2016. The CIRP was admitted on 2019-07-04. The Resolution Professional was appointed as IRP and continued as RP. No claims were received pursuant to a public announcement on 2019-07-17, resulting in a CoC with only one operational creditor, Servel Electronics Pvt. Ltd. The 2nd CoC meeting on 2019-10-15 revealed that the company had no assets and was only a trading concern. The CoC resolved to seek liquidation without inviting resolution plans and fixed the Liquidator's fee at Rs. 50,000 per month. The application for liquidation was filed on 2020-03-02. The Resolution Professional was frequently absent from hearings, causing delays. The Resolution Professional

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## Issues and analysis

### Issue 1: Whether the application for liquidation of the Corporate Debtor, Varnika Industries Private …

**Ratio:** Section 33(1)(a) of the Insolvency & Bankruptcy Code, 2016, allows the Adjudicating

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**Reasoning:** The Adjudicating Authority noted that the efforts to obtain a resolution of the Corporate

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**Interpretation:** Section 33(1)(a) provides a clear pathway for liquidation when resolution

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**Application:** Given the failure of the CIRP and the CoC's resolution to seek liquidation, the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** Serwel Electronics…
- **Respondents:** Varnika Industries…; Varnika Industries…

## Timeline

- **2019-07-04 — CIRP Init…**: Company Petition filed by Servel Electronics…
- **2019-07-17 — Public Annou…**: Public announcement made,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(1) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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