2019 (7) TMI 1852 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - Section 33(2), Section 34(1) Section 60(5) Of Insolvency And Bankruptcy Code 2016, Read With Rule 11 Of National Company Law Tribunal Rules, 2016 - HELD THAT - As Per Section 33(1) (a) of the Code if the Resolution Plan is not received under Section 30(6) with in CIRP period, the Tribunal has no other option but to pass a liquidation order. The Resolution Professional has not filed any Resolution Plan before this Tribunal under Section 30(6) with in CIRP period and the Resolution Plan submitted by the M/s Santhoshimathaa Edible Oils Refinery Private Limited was rejected by the COC with 69% voting share. By relying on Section 33(1)(a) of the Code, the Resolution Professional having not submitted any Resolution Plan within CIRP period leads to passing an order of liquidation. There are no other alternative other than passing an order of liquidation requiring the Corporate Debtor, namely M/s. Southern Online Bio Technologies Limited, to be liquidated in the manner laid down in Chapter 3 of Part 2 of the Insolvency and Bankruptcy Code, 2016. As per Section 34(1) of the Code after passing order of liquidation of corporate Debtor the Resolution Professional appointed for CIRP Process should act as Liquidator for conducting Liquidation Process. Accordingly Mrs. G.Kalpana, is appointed as the Liquidator - application allowed.

Issues Involved:
1. Initiation of Liquidation Process.
2. Appointment of Liquidator.
3. Compliance with Insolvency and Bankruptcy Code (IBC), 2016 and related regulations.
4. Voting by Committee of Creditors (CoC) on Resolution Plan.
5. Powers and duties of the Liquidator.
6. Effects of Liquidation Order.

Detailed Analysis:

1. Initiation of Liquidation Process:
The application was filed by the Resolution Professional under Section 33(2), Section 34(1), and Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking orders for liquidating the Corporate Debtor, M/s. Southern Online Bio Technologies Limited. The Corporate Insolvency Resolution Process (CIRP) started against the Corporate Debtor on 05.10.2018, following a petition by the Bank of India under Section 7 of IBC, 2016. Despite multiple efforts and extensions to invite and negotiate Resolution Plans, the CoC, with a 69% voting share, ultimately voted against the Resolution Plan submitted by M/s Santhoshimathaa Edible Oils Refinery Private Limited. Consequently, as per Section 33(1)(a) of the Code, the Tribunal had no option but to pass a liquidation order since no Resolution Plan was approved within the CIRP period.

2. Appointment of Liquidator:
As per Section 34(1) of the IBC, 2016, upon passing the liquidation order, the Resolution Professional, Ms. G. Kalpana, was appointed as the Liquidator. She had already consented to this appointment on 01.07.2019.

3. Compliance with Insolvency and Bankruptcy Code (IBC), 2016 and related regulations:
The Resolution Professional complied with various provisions and regulations under the IBC, 2016. This included public announcements, filing lists of creditors, and inviting expressions of interest as per the stipulated timelines and regulations. The application and subsequent proceedings adhered to the guidelines laid down in the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and IBBI (Liquidation Process) Regulations, 2016.

4. Voting by Committee of Creditors (CoC) on Resolution Plan:
The CoC, constituted with creditors including BOI, SBI, UCO, and PNB, held multiple meetings to discuss and vote on the Resolution Plans. Despite receiving three Resolution Plans, the CoC, with a 69% voting share, voted against the plan submitted by M/s Santhoshimathaa Edible Oils Refinery Private Limited. Consequently, the CoC resolved to liquidate the Corporate Debtor.

5. Powers and duties of the Liquidator:
Upon appointment, the Liquidator was directed to proceed with the liquidation process as per Chapter III of Part 2 of the IBC, 2016, and IBBI (Liquidation Process) Regulations, 2016. The Liquidator was vested with all powers of the Board of Directors, key managerial personnel, and partners of the Corporate Debtor. The Liquidator was also instructed to issue a public announcement regarding the liquidation and to submit a Preliminary Report within 75 days from the liquidation commencement date.

6. Effects of Liquidation Order:
The liquidation order resulted in the cessation of the moratorium under Section 14 of the IBC, 2016. It also served as a notice of discharge to the officers, employees, and workmen of the Corporate Debtor as per Section 33(7) of the Code. Furthermore, no suits or legal proceedings could be initiated by or against the Corporate Debtor, except as provided under Section 52 of the Code. The Liquidator was allowed to initiate legal proceedings with prior approval from the Adjudicating Authority.

Conclusion:
The application for liquidation was allowed, and M/s. Southern Online Bio Technologies Limited was ordered to be liquidated. The appointed Liquidator, Ms. G. Kalpana, was directed to follow the liquidation process as laid down in the relevant regulations, and the application was disposed of accordingly.

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