2020 (2) TMI 1561 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(1)(a) of I B Code - HELD THAT - Since, there was no resolution of the stressed assets of the Corporate Debtor under consideration for the approval of the Adjudicating Authority under Section 31 of the Code and since the Resolution Professional prays for passing an order of liquidation these applications require no consideration. It is also significant to note that 330 days of CIRP period, been expired on 29/01/2020. Therefore, all these applications can be disposed of with a liberty to submits their respective claim to the liquidator appointed in the case in hand. With the above said observations, all these applications are to be disposed of. Thus, no resolution plan is forthcoming to resolve the stressed assets of the Corporate Debtor there is no other alternative than to pass an order of liquidation requiring the Corporate Debtor to be liquidated in the manner as laid down in Chapter 3 read with Section 33(1)(a) of the Code. Mr.Kannan Tiruvengadam has given written consent to continue as the Liquidator and hence he is to be appointed as the Liquidator. The Corporate Debtor has been ordered to be liquidated - Application allowed.

Summary

Issues:
1. Admission of application under Sec. 7 of the Insolvency and Bankruptcy Code, 2016 for corporate insolvency resolution process.
2. Evaluation of resolution plans submitted by prospective Resolution applicants.
3. Decision-making process by the Committee of Creditors regarding resolution plans.
4. Finalization of resolution plan through voting by the Committee of Creditors.
5. Recommendation for liquidation due to failure in approving any resolution plan.
6. Consideration of applications by Operational Creditors due to delay in claim submission.
7. Appointment of Liquidator and passing order for liquidation of the Corporate Debtor.
8. Directions regarding the liquidation process and communication of orders to relevant authorities.

Analysis:

1. The case involved the admission of an application by Uco Bank/Financial Creditor under Sec. 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the corporate insolvency resolution process against the Corporate Debtor/BRG Iron and Steel Co. Private Limited. The initial application was admitted, and an Interim Resolution Professional (IRP) was appointed, later continuing as the Resolution Professional. However, no resolution plan was approved by the Committee of Creditors, leading to the recommendation for liquidation.

2. The Resolution Professional evaluated resolution plans from prospective Resolution applicants, including Jindal Stainless (Hissar) Limited and Rimjhim Ispat Limited. The plan from Jindal Stainless (Hissar) Limited was found non-compliant, while the modified plan from Rimjhim Ispat Limited was considered by the Committee of Creditors for further negotiation and approval.

3. The decision-making process by the Committee of Creditors involved deliberations on the revised resolution plan submitted by Rimjhim Ispat Limited. The members voted on the plan, with the Resolution Professional facilitating the process and considering proposals for plan improvement.

4. Despite discussions and voting, the resolution plan of Rimjhim Ispat Limited was not approved by the Committee of Creditors, leading to the Resolution Professional recommending liquidation as no viable resolution plan was forthcoming for the stressed assets of the Corporate Debtor.

5. Operational Creditors pressed applications for consideration, citing delays in claim submission. However, with the CIRP period expiring and no resolution plan under consideration, the applications were disposed of, allowing submission of claims to the appointed Liquidator.

6. Considering the circumstances and absence of an approved resolution plan, the Tribunal passed an order for liquidation, appointing the Resolution Professional as the Liquidator to manage the liquidation process in accordance with the Insolvency and Bankruptcy Code.

7. The Tribunal issued directions regarding the liquidation process, communication of orders to relevant authorities, cessation of the moratorium, and discharge of Officers, employees, and workmen of the Corporate Debtor, emphasizing compliance with the Code and Regulations.

8. Finally, the Tribunal disposed of the relevant applications and the main case, providing liberty to submit claims before the Liquidator as per the provisions of the Code and Regulations.