2019 (6) TMI 1518 - Tri - Insolvency and Bankruptcy

Approval of Resolution Plan - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - CIRP process - HELD THAT - The Liquidator has furnished written consent dated 30.05.2019 attached to IA No. 267/2019, stating that he is eligible to be appointed as Liquidator of the Corporate Debtor in accordance with the provisions of Insolvency and Bankruptcy Board (Liquidation Process) Regulations, 2016. Therefore, Committee of Creditors and Resolution Professional have proposed Liquidation Process under Section 33(2) of the insolvency and Bankruptcy Code, 2016 - thus, there are sufficient grounds to initiate Liquidation Process. Application disposed off.

Summary

Issues:
1. Consideration of two interim applications under the Insolvency and Bankruptcy Code, 2016.
2. Approval of resolution for initiation of Liquidation Process and appointment of Liquidator.
3. Examination of the Committee of Creditors' decisions and actions.
4. Financial aspects related to insolvency process costs and refund claims.
5. Previous Tribunal orders and their impact on the current proceedings.
6. Appointment of Liquidator and related procedures under the IBC, 2016.

Analysis:
1. The Tribunal reviewed two interim applications, one for acceptance and approval of the resolution for Liquidation Process initiation and the other for the appointment of a Liquidator under the Insolvency and Bankruptcy Code, 2016.
2. The Committee of Creditors, comprising mainly operational creditors, decided to proceed with liquidation due to the defunct status of the company and lack of tangible assets, leading to the appointment of a Liquidator for realization of dues.
3. Financial constraints were highlighted, with insufficient funds in the company's account to cover the insolvency process costs, pending income tax refunds, and potential service tax refunds, prompting the Resolution Professional to seek assistance from statutory authorities.
4. Previous Tribunal orders regarding interim finance and income tax refund were discussed, emphasizing the need for expediting the refund process and excluding specific days from the statutory period.
5. The Resolution Professional's detailed submissions outlined the challenges faced, lack of response to public announcements, and the Committee of Creditors' decision to initiate liquidation despite the reluctance of a major creditor.
6. After careful consideration, the Tribunal appointed a Liquidator, outlined the necessary steps for liquidation process initiation, transfer of powers, cooperation requirements, legal proceedings restrictions, and fee determination based on the liquidation estate assets, ensuring justice in fee recovery from income tax refunds.

This comprehensive analysis of the Tribunal's judgment highlights the key issues addressed, decisions made, and legal provisions applied in the context of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016.