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2019 (11) TMI 1642 - Tri - Insolvency and BankruptcySeeking liquidation of the corporate debtor - Section 33 and 34 of the Insolvency and Bankruptcy Code, 2016 - It is submitted that compliance of various regulations was made by the Committee of Creditors in the 6th Meeting held on 15.10.2019. It was thereby pleaded that the requirements of Regulation 39B, 39C and 39D of the CIRP Regulation 2016 are satisfied in the present case - HELD THAT - In view of the compliances made, we are satisfied that the corporate debtor-company is required to be liquidated and accordingly, we order for the same. It is directed that all the directions/requirements and provisions of Chapter III of the Code and Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (hereinafter referred to as 2016 Regulations ) shall be strictly complied with - The Liquidator shall publish public announcement in accordance with Regulation 12 of the 2016 Regulations and in Form B of Schedule II of these Regulations within five days from receipt of this order calling upon the stake holders to submit their claims as on liquidation commencement date and provide the last date for submission of claim which shall be 30 days from the liquidation commencement date. Application disposed off.
Issues Involved:
1. Application for liquidation under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016. 2. Appointment of a liquidator. 3. Compliance with Regulations 39B, 39C, and 39D of the CIRP Regulations 2016. 4. Directions and provisions for liquidation under Chapter III of the Code and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Issue-wise Detailed Analysis: 1. Application for Liquidation: The application CA No.910/2019 was filed by the Resolution Professional (RP) for M/s Sahil International Pvt. Ltd., seeking liquidation based on the decision taken in the 6th Meeting of the Committee of Creditors (COC) held on 15.10.2019. The application was filed under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016. The Tribunal noted that the initial resolution plan was not received within the stipulated period, and even after re-issuance of the invitation for expression of interest (EOI), no resolution plan was received. Consequently, the COC decided to liquidate the corporate debtor, passing the resolution with 100% majority. 2. Appointment of a Liquidator: Section 34 of the Code mandates that the RP appointed for the CIRP shall act as the liquidator unless replaced by the Adjudicating Authority. In this case, the RP, Mr. Mahesh Chandra Purohit, did not consent to act as the liquidator. Therefore, the Tribunal directed the Board to propose another insolvency professional. Mr. Harvinder Kumar Jatana was selected from the panel approved for NCLT, Chandigarh Bench, and appointed as the liquidator after verifying his credentials. 3. Compliance with Regulations 39B, 39C, and 39D of the CIRP Regulations 2016: The Tribunal examined the compliance with newly inserted Regulations 39B, 39C, and 39D of the CIRP Regulations 2016. In the 6th Meeting of the COC, the following were discussed: - Regulation 39B: The COC could not estimate the liquidation cost and the difference between liquidation cost and liquid assets, hence did not approve any plan for meeting the difference. - Regulation 39C: The COC decided that it was not feasible to sell the corporate debtor as a going concern. - Regulation 39D: The COC decided not to fix any fee payable to the liquidator. The Tribunal noted that the compliance with these regulations was made by the COC in its 6th Meeting. 4. Directions and Provisions for Liquidation: The Tribunal ordered the liquidation of the corporate debtor and directed compliance with all directions and provisions of Chapter III of the Code and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Key directions included: - No suit or legal proceedings to be instituted against the corporate debtor, except by the liquidator with prior approval. - The liquidation order to be deemed as a notice of discharge to officers, employees, and workmen, except when the business is continued by the liquidator. - All powers of the Board of Directors, key managerial personnel, and partners to vest in the liquidator. - Personnel of the corporate debtor to extend all assistance and cooperation to the liquidator. The liquidator was also directed to publish a public announcement within five days, file a preliminary report within 75 days, and regular progress reports every fortnight. The Tribunal clarified that financial creditors could still enforce personal guarantees and instructed the RP to take possession of the corporate debtor's assets. The application CA No.726/2019 was disposed of, and copies of the order were directed to be supplied to relevant parties.
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