2019 (5) TMI 1663 - Tri - Insolvency and Bankruptcy

Liquidation Order of Corporate Debtor - automatic consequence upon completion of 270 days on non- receipt of resolution plan be kept pending - Section 33 (I) of the Code - HELD THAT - Even the statutory provisions as envisages in Section 33 (1) (a) of the Code mandates that where the Adjudicating Authority before the expiry of the maximum period permitted for completion of the corporation insolvency resolution process under Section 12 does not receive a resolution plan under sub-section (6) of Section 30, it shall pass an order requiring the corporate debtor to be liquidated in the manner as laid down in the Chapter. Therefore, upon failure of resolution process there being no resolution plan and on completion of the statutory period of 270 days; Liquidation has to follow. Adherence to statutory requirement has to be in toto. When the language of the Code is clear and explicit the Adjudicating Authority must give effect to it whatever may be the consequence. In the factual background and in the absence of any resolution plan and for want of time beyond statutory CIRP period; there is no other alternative but to order for liquidation of the corporate debtor under Section 33 (I) (a) of the Code. The application is allowed by ordering liquidation of the corporate debtor, namely M/S Moser Baer Solar Limited in the manner laid down in the Chapter Ill of Part Il of the Insolvency and Bankruptcy Code, 2016.

Summary

Issues:
1. Application for liquidation of the corporate debtor under Section 33 (I) of the Insolvency and Bankruptcy Code.
2. Appointment of Resolution Professional and subsequent proceedings.
3. Valuation of assets and appointment of valuers.
4. Committee of Creditors' decisions and refusal to allow liquidation.
5. Judicial precedents and legal provisions regarding liquidation orders.
6. Directions for the liquidation process and appointment of a Liquidator.

Detailed Analysis:
1. The Tribunal received an application for the liquidation of the corporate debtor, M/S. Moser Baer Solar Limited, under Section 33 (I) of the Insolvency and Bankruptcy Code. The application was filed by the Resolution Professional seeking liquidation due to the expiration of the statutory Corporate Insolvency Resolution Process period of 270 days without receiving any resolution plan for the debtor.

2. The Resolution Professional, initially appointed as the Interim Resolution Professional, conducted the Corporate Insolvency Resolution Process. However, the Committee of Creditors later replaced the Resolution Professional with the present Applicant, following due procedures under the Code. The Resolution Professional also obtained extensions for the Corporate Insolvency Resolution Process period based on applications filed.

3. The Interim Resolution Professional appointed valuers to ascertain the liquidation value of the assets of the Corporate Debtor, which was determined to be INR 72.425 crores based on valuation reports from two valuers. This valuation was conducted in compliance with the regulations under the Insolvency and Bankruptcy Code.

4. Despite the expiry of the statutory period and the absence of any resolution plan for the Corporate Debtor, the Committee of Creditors refused to allow the Resolution Professional to file for liquidation. The Committee cited ongoing legal proceedings related to the realization of funds by the Corporate Debtor as a reason for postponing the liquidation decision.

5. The Tribunal referred to various judicial precedents and legal provisions, including decisions by the National Company Law Appellate Tribunal, emphasizing that in the absence of a resolution plan within the stipulated period, the Adjudicating Authority is mandated to pass a liquidation order. The Tribunal highlighted the clear language of the Code requiring adherence to statutory requirements in such cases.

6. Finally, the Tribunal granted the application for liquidation of the Corporate Debtor, appointing a Liquidator and issuing specific directions for the liquidation process. The Liquidator was tasked with various responsibilities, including ensuring the continuation of the debtor's business during liquidation, investigating financial affairs, and submitting reports to the Adjudicating Authority within the specified timeline. The Tribunal also addressed the disbursement of subsidies and communicated the order to relevant parties for compliance.