2020 (1) TMI 1180 - AT - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - HELD THAT - In the interest of the stakeholders/financial creditors, operational creditors (employees) if the period of compliance of both the resolution plans of Adhunik Metaliks Ltd. (one Corporate Debtor) and Zion Steel Ltd. (another Corporate Debtor ) are extended, who otherwise will suffer Liquidation , we allowed the Successful Resolution Applicant - Adhunik Metaliks Ltd. to file undertaking giving timeframe of compliance of both the plans by depositing the amount as offered in their approved plans. Once the total amount is deposited, this Appellate Tribunal will consider the rest of the proposal as made in paragraph 7, and quoted above and will pass appropriate order - Place these appeals for orders on 17th February, 2020 before the 1st Bench on the top of the list.

Summary

Issues:
1. Compliance with resolution plans of two corporate debtors.
2. Extension of compliance period for resolution plans to avoid liquidation.
3. Deposit and implementation of proposed amounts by the resolution applicant.
4. Setting aside liquidation orders of the corporate debtors.

Issue 1: Compliance with Resolution Plans
The judgment pertains to an appeal filed by the 'Liberty House Group Pte. Ltd.' seeking permission to comply with the resolution plans of 'Adhunik Metaliks Ltd.' and 'Zion Steel Ltd.' The appellant requested to set aside the liquidation orders of both corporate debtors.

Issue 2: Extension of Compliance Period
The Appellate Tribunal, after reviewing the affidavit and hearing arguments from counsels, decided to extend the compliance period for the resolution plans. This extension aimed to prevent the liquidation of the corporate debtors and safeguard the interests of stakeholders, financial creditors, and operational creditors.

Issue 3: Deposit and Implementation of Proposed Amounts
The 'Liberty House Group Pte. Ltd.' was directed to deposit specific amounts as per the approved resolution plans. The appellant was instructed to deposit Rs. 360 crores for 'Adhunik Metaliks Ltd.' and Rs. 10 crores for 'Zion Steel Ltd.' by a specified date. Additionally, an extra Rs. 10 crores was to be deposited as a goodwill gesture. The resolution applicant was also required to cover corporate insolvency resolution process costs.

Issue 4: Setting Aside Liquidation Orders
To provide an opportunity to the successful resolution applicant, the Tribunal allowed 'Liberty House Group Pte. Ltd.' to comply with the proposed amounts. The appellant was directed to deposit the specified sums in the designated bank accounts by a set deadline. Once the total amount was deposited, the Tribunal would consider further actions and placed the appeals for orders on a specified date.

This judgment showcases the Appellate Tribunal's focus on ensuring compliance with resolution plans to avoid liquidation, highlighting the importance of timely financial commitments by resolution applicants to protect the interests of all stakeholders involved in the insolvency resolution process.