In Ram Bhaj Jain v Tarun Batra
In response to a petition submitted by Lender Bank under Section 7 of the Insolvency and Bankruptcy Act, 2016, Vardhman Rice Mills Pvt. Ltd. (“Corporate Debtor”) was admitted into the Corporate Insolvency Resolution Process (“CIRP”) by the adjudicating authority.
Since no resolution plan was approved, the corporate debtor’s resolution professional, applied to the adjudicating authority under Section 33 of the IBC for seeking directions for liquidation of the corporate debtor. In a decision, the adjudicating authority directed for the liquidation of the Corporate Debtor.
The decision of liquidation was challenged in an appeal Appellant, the suspended director of the corporate debtor, filed before NCLAT.
Appellant submitted that the Corporate Debtor is a Micro, Small and Medium Enterprise (MSME) and therefore the Appellant had submitted a Resolution Plan for the Corporate Debtor. The Committee of Creditors consisting of only one lender Bank rejected the resolution plan without giving any reasons.
Furthermore, a One Time Settlement (OTS) proposal of the Corporate Debtor was under consideration before the Lender Bank.
It was has held that mere fact that the Corporate Debtor’s One Time Settlement was under consideration, does not invalidate an order passed by the Adjudicating Authority for liquidation of the Corporate Debtor.
-Adv. Thakur Dipika
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