2018 (12) TMI 1711 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 9 of the I B Code, 2016 - HELD THAT - This Adjudicating Authority did not receive any Resolution Plan under Sub-section (6) of Section 30. Therefore, in exercise of powers conferred under Sub-Clauses (i) (ii) and (iii) of Clause (b) of Sub-Section (1) of Section 33 of the I B Code, 2016, this Authority proceeds to pass Liquidation Order. This Authority hereby orders for liquidation of the Corporate Debtor viz., M/s. Matrix Metal Traders Private Limited which shall be conducted in the manner as laid down in Chapter III of part II of the I B Code, 2016 - Petition Admitted - moratorium declared.

Summary

Issues: Liquidation order sought under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016 for Corporate Debtor M/s. Matrix Metal Traders Private Limited.

Analysis:
1. Background: The case originated from a petition filed under Section 9 of the I&B Code, 2016 by an Operational Creditor against the Corporate Debtor, which led to the appointment of an Interim Resolution Professional (IRP).

2. Appointment of Resolution Professional: The Resolution Professional faced objections from a CoC member, Tamil Nadu Mercantile Bank, which raised concerns regarding the appointment of the IRP. This objection led to a direction from the Authority for reconsideration of the IRP's appointment.

3. Disputes within CoC: Subsequent CoC meetings were marred by objections from the Tamil Nadu Mercantile Bank regarding the status of another Financial Creditor, Easy Access Financial Services Limited. The disagreement within the CoC hindered the progress of the resolution process.

4. Liquidation Order: As no Resolution Plan was received within the stipulated time frame, the Resolution Professional sought a liquidation order under Section 33(1)(a) of the I&B Code, 2016, citing the absence of a viable resolution plan.

5. Judicial Decision: The Adjudicating Authority, based on the Resolution Professional's submissions and the absence of a Resolution Plan, ordered the liquidation of the Corporate Debtor, M/s. Matrix Metal Traders Private Limited. The Authority appointed the Interim Resolution Professional as the Company Liquidator to oversee the liquidation process.

6. Operational Aspects: The order specified the cessation of moratorium, transfer of decision-making powers to the Company Liquidator, and the procedures to be followed during the liquidation process. Additionally, the Company Liquidator was authorized to charge fees as per IBBI guidelines.

7. Compliance and Communication: The Authority directed the Registry to inform relevant stakeholders, including the Registrar of Companies and the Company Liquidator, about the liquidation order for compliance.

8. Disposition of Applications: The Authority disposed of the application seeking liquidation and dismissed another application as infructuous due to the liquidation order being passed.

In conclusion, the judgment by the National Company Law Tribunal, Chennai, highlights the procedural complexities and disputes within the Committee of Creditors that led to the liquidation order for the Corporate Debtor, emphasizing the importance of adherence to the provisions of the Insolvency and Bankruptcy Code, 2016 in resolving insolvency cases effectively.