# In the matter of Zenith Automotive Private Limited IA No. 941-2022 in Company Petition (IB) No. 577-ND-2020

> NCLT judgment dated 2022-06-02. Citation: TCN-2022-NCLT-02458. The case involves a Company Petition (IB) No. 577/ND/2020 filed by the Operational Creditor,…

- **Court:** NCLT
- **Order date:** 2 Jun 2022
- **Citation:** TCN-2022-NCLT-02458
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/zenith-automotive-private-limited-ia-no-941-2022-in-company-petition-ib-no-577-n-bd5eac4b

## Summary

### Background

The case involves a Company Petition (IB) No. 577/ND/2020 filed by the Operational Creditor, M/s Redhex IT Solutions Private Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s Zenith Automotive Private Limited. The petition was admitted, and an Interim Resolution Professional (IRP) was appointed. The IRP then became the Resolution Professional (RP), Mohd. Nazim Khan. The CIRP commenced on 2021-09-24. The Committee of Creditors (COC) consisted of a sole member. Form-G was published to invite resolution plans. However, no resolution plan was received from the sole Prospective Resolution Applicant (PRA), Efficacy Finance Services Private Limited, by the

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## Facts

M/s Redhex IT Solutions Private Limited, an Operational Creditor, initiated CIRP against M/s Zenith Automotive Private Limited, the Corporate Debtor, under Section 9 of the IBC. The CIRP commenced on 2021-09-24. Mohd. Nazim Khan was appointed as the Resolution Professional. A sole Prospective Resolution Applicant (PRA), Efficacy Finance Services Private Limited, expressed interest but failed to submit a resolution plan by the deadline of 2022-02-05. The Committee of Creditors (COC), consisting of a single member, convened on 2022-02-16 and resolved to liquidate the Corporate Debtor due to the absence of a resolution plan and insufficient assets to cover CIRP and liquidation costs. The RP sought approval from the Adjudicating Authority for liquidation. The Adjudicating

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Zenith Automotive Private Limited, should be liquidated due to the …

**Ratio:** Section 33 of the Insolvency and Bankruptcy Code (IBC) allows for the liquidation of a

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**Reasoning:** The Committee of Creditors (COC) resolved to liquidate the Corporate Debtor because no

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**Interpretation:** Section 33 of the IBC provides a mechanism for liquidation when the CIRP fails

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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:** Sh. Abni Ranjan…; Sh. Hemant Kumar…
- **Appellants:** M/s Redhex IT…
- **Respondents:** M/s Zenith…; Rajesh Sriv…

## Timeline

- **2021-09-24 — Commencement…**: The Corporate Insolvency…
- **2021-09-26 — Public Announcement…**: Public announcement was made to…

## 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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