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2017 (10) TMI 1507 - Tri - Insolvency and BankruptcyApproval of Resolution Plan - extension of date for submission of resolution plan - statutory time limit for submission of Resolution Plan failed - HELD THAT - Since statutory time limit of 270 days for submission of Resolution Plan has failed therefore corporate Debtor shall go under liquidation as per provision Chapter 3 of Insolvency Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Liquidation Process Regulation), 2016. Copy of the order may be sent to Registrar of Companies. The liquidator shall issue a public announcement stating that the corporate debtor Nicco Corporation Pvt Ltd. is in liquidation - Moratorium u/s 14 of IBC shall cease to have effect - fresh Moratorium starts under sub section (5) of Sec 33 of IBC.
Issues:
1. Admission of company application under section 10 of IBC 2016. 2. Extension of time for submission of resolution plan. 3. Failure of resolution process and approval by COC. 4. Proposal by strategic investor and consideration by RP. 5. Initiation of liquidation process due to failure of resolution plan. 6. Appointment of liquidator and commencement of liquidation process. Analysis: 1. The company application filed by Nicco Corporation Limited under section 10 of the Insolvency and Bankruptcy Code, 2016 was admitted on 18th January 2017. Subsequently, Sri Kunal Banerjee was appointed as the Interim Resolution Professional (IRP), later confirmed as the Resolution Professional by the Committee of Creditors (COC). The Resolution Process was initially set to be completed by 16th July 2017. 2. The COC recommended a further extension of 90 days for the submission of the resolution plan, which ended on 14th October 2017. However, the Resolution Professional submitted a report on 12th October 2017, stating the failure of the Resolution Process during the COC meeting on 6th October 2017. The Resolution Plan for the revival of the Corporate Debtor was put to vote, with 88.38% of COC members voting against it. 3. Following the failure of the Resolution Plan, a strategic investor, M/S Shreekunj Securities Pvt Ltd, submitted a proposal to the RP, expressing interest in investing in the company. However, the complete proposal was not submitted in time for consideration before the COC meeting. A subsequent meeting of the COC was held on 11th October 2017 to discuss the future course of action. 4. Due to the statutory time limit of 270 days for the submission of the Resolution Plan being exceeded, the Corporate Debtor was directed to go into liquidation as per the provisions of the Insolvency and Bankruptcy Code, 2016, and the Insolvency and Bankruptcy Board of India (Liquidation Process Regulation), 2016. The liquidator, Sri Vinod Kothari, PCS, was appointed to proceed with the liquidation process. 5. The order of Moratorium passed under Section 14 of the IB Code ceased to affect the proviso to subsection (4) of Section 14, and a fresh Moratorium commenced under subsection (5) of Section 33 of the IBC. The order of liquidation passed under Section 33 was deemed to be a notice of discharge to the officers, employees, and workmen of the corporate debtor, marking the transition into the liquidation phase.
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