2020 (12) TMI 1274 - Tri - Companies Law

Liquidation of Corporate Debtor - no resolution plan has been approved and the Committee of Creditors (CoC) has unanimously decided to initiate liquidation proceedings of the Corporate Debtor - Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Today the CIRP is at this stage that not only 270 days of CIRP have expired but also a huge period beyond 330 days has lapsed. Ms. Vandana Garg is hereby appointed as Liquidator as provided under Section 34(1) of the Code - liquidation application allowed.

Summary

Issues:
1. Liquidation application under Section 33(1) of the Insolvency and Bankruptcy Code, 2016.
2. Extension of Corporate Insolvency Resolution Process (CIRP) period.
3. Failure of Corporate Debtor to make upfront payment leading to liquidation application.
4. Appointment of Liquidator and initiation of liquidation proceedings.
5. Direction to hand over relevant documents for fraudulent transactions investigation.

Detailed Analysis:
1. The judgment pertains to an application filed by the Resolution Professional seeking liquidation of the Corporate Debtor due to the absence of an approved resolution plan and the unanimous decision of the Committee of Creditors (CoC) to initiate liquidation proceedings. The application was made under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, requesting approval for liquidation and any other necessary orders as deemed fit by the Tribunal.

2. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was initiated earlier following a petition by an Operational Creditor under Section 9 of the Code. The Interim Resolution Professional (IRP) was appointed and later confirmed as the Resolution Professional (RP). The RP sought an extension of the CIRP period by 90 days, which was granted by the Tribunal, extending the period till a specified date.

3. Discussions for withdrawal of the petition under Section 12A of the Code occurred as the Corporate Debtor had agreed to make an upfront payment to creditors but failed to fulfill the payment condition within the stipulated time frame. Consequently, the RP was left with no choice but to file the liquidation application due to the Corporate Debtor's non-compliance with the payment terms.

4. The Tribunal, after considering all submissions and documents, allowed the Miscellaneous Application and appointed a Liquidator to conduct the liquidation proceedings in accordance with the Code and relevant regulations. The Liquidator was granted powers as per Section 34(1) of the Code, superseding the authority of the Corporate Debtor's management.

5. Additionally, another Miscellaneous Application was mentioned, filed for fraudulent transactions against ex-promoters and directors. As the liquidation application was approved, no orders were passed on the fraudulent transactions application, and the RP was directed to hand over relevant documents to the appointed Liquidator for further action, keeping the matter pending for later disposal.