# In the matter of Suryajyothi Spinning Mills Limited IA No.739 of 2023 in CP(IB) No.166-7-HDB-2019

> NCLT judgment dated 2023-06-30. Citation: TCN-2023-NCLT-05391. State Bank of India filed an application seeking to replace the Liquidator of Suryajyothi…

- **Court:** NCLT
- **Order date:** 30 Jun 2023
- **Citation:** TCN-2023-NCLT-05391
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/suryajyothi-spinning-mills-limited-ia-no739-of-2023-in-cpib-no166-7-hdb-2019-7ad33a5a

## Summary

### Background

State Bank of India filed an application seeking to replace the Liquidator of Suryajyothi Spinning Mills Limited, the Corporate Debtor, with Mr. Madhusudhan Rao Gonugunta.

## Facts

State Bank of India filed an application to replace the Liquidator of Suryajyothi Spinning Mills Limited.

The Applicant (State Bank of India) holds a majority voting share in the Committee of Creditors (CoC).

The Applicant cited a lack of confidence in the current Liquidator and alleged delays in the liquidation process.

The Liquidator argued that the application was not maintainable without specific allegations of wrongdoing.

The Liquidator was appointed by the Tribunal, not by suggestion from stakeholders.

The Corporate Debtor was ordered for liquidation after the CIRP process.

The Applicant had not filed its claim or relinquished its security interest to be part of the Consultation Committee.

…

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the power to replace a Liquidator even in the absence of …

**Ratio:** The Adjudicating Authority retains the discretion to change the Liquidator, even without

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**Reasoning:** The Tribunal emphasized that the liquidation process can only be effectively carried

…

**Interpretation:** The discretion of the Adjudicating Authority to change the Liquidator is always

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**Application:** The Tribunal exercised its discretion to replace the Liquidator based on the

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## Parties

- **Judges:** TELAPROLU…; SH. CHARAN…
- **Appellants:** State Bank of…
- **Respondents:** Suryajyothi…; Kondapalli Venkat…
- **Other parties:** Madhusudhan Rao…; Dr.K.V.Sr…; +1 more
- **Advocates:** Mr.V.V.S.…

## Timeline

- **2019-10-10 — CoC Meet…**: The CoC confirmed the IRP as Resolution…
- **N/A — Liquidation…**: The Corporate Debtor was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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