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2019 (12) TMI 1369 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - Section 33(2) of the IBC, 2016 - HELD THAT - At the time of hearing, there was an objection by the suspended director before this Tribunal. The suspended director has submitted that he is willing to settle the entire dues of the Bank of India, who constitute more than 90% of the total value of credit. However, this Tribunal has granted ample time to the suspended director to settle of its dues to the Financial Creditor and then approach this Tribunal by filing an application under Section 12A of the IBC, 2016, but it never fructified - Since there was no invitation for Expression of Interest was issued, the CoC based on commercial considerations has decided to liquidate the Corporate Debtor. Taking into consideration the provisions of Section 33 of IBC, 2016 and also guided by the decision of the Hon'ble Supreme Court in the matter of Mr. K. Sasidharan -Vs- Indian Overseas Bank 2019 (2) TMI 1043 - SUPREME COURT this Tribunal orders for the liquidation of the Corporate Debtor. Application allowed.
Issues:
1. Liquidation of the Corporate Debtor under Section 33(2) of the IBC, 2016. 2. Non-cooperation of suspended directors during the CIRP. 3. Decision to liquidate the Corporate Debtor by the CoC. 4. Appointment of a new liquidator as the IRP did not consent. 5. Further actions regarding MA/563/2019 against the suspended directors. Issue 1: Liquidation of the Corporate Debtor under Section 33(2) of the IBC, 2016: The Resolution Professional filed MA/886/2019 seeking liquidation of the Corporate Debtor due to non-cooperation of suspended directors. The Corporate Debtor's CIRP was initiated earlier, and claims were received from financial creditors. The CoC, after multiple meetings, decided to liquidate the Corporate Debtor based on commercial considerations. The Tribunal, guided by legal provisions and a Supreme Court decision, ordered the liquidation. Issue 2: Non-cooperation of suspended directors during the CIRP: The suspended directors failed to cooperate, did not attend meetings, and diverted business operations to a relative's entity. Despite efforts, they did not provide necessary documents or information. The suspended director offered to settle dues with a major creditor, but the Tribunal granted time which was not utilized. MA/563/2019 was filed against the suspended directors under Section 19(2) of the IBC, 2016. Issue 3: Decision to liquidate the Corporate Debtor by the CoC: The CoC unanimously resolved to liquidate the Corporate Debtor due to non-cooperation of directors and lack of business activities. No Expression of Interest was called for as there was no viable business. The CoC directed the Resolution Professional to approach the Tribunal for liquidation. Issue 4: Appointment of a new liquidator as the IRP did not consent: As the IRP did not consent to act as a liquidator, the Tribunal directed the IBBI to propose a new Insolvency Professional within 10 days. Once the new name is proposed, further orders will be passed for the liquidation process. Issue 5: Further actions regarding MA/563/2019 against the suspended directors: Given the inclination towards liquidation, the Tribunal allowed the liquidator to pursue MA/563/2019 if non-cooperation persists during the liquidation stage. The Tribunal scheduled further orders on both MA/886/2019 and MA/563/2019 for a specified date.
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