2018 (11) TMI 1872 - Tri - Insolvency and Bankruptcy

Seeking liquidation of the Corporate Debtor - seeking to allow the Liquidator to dispose of the assets of the Corporate Debtor as a going concern basis - Sections 33(1)(a) and 34 (1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In view of the facts and circumstances recorded by Resolution Professional, this Adjudicating Authority did not receive any Resolution Plan under Sub-section (6) of Section 30. Therefore, in exercise of powers conferred under Sub-Clauses (i) (li) and (iii) of Clause (b) of SubSection (1) of Section 33 of the I B Code, 2016, this Authority proceeds to pass Liquidation Order - this Authority hereby orders for liquidation of the Corporate Debtor viz., M/s. Ashok Magnetic Limited, which shall be conducted in the manner as laid down in Chapter III of part II of the I B Code, 2016. Application allowed.

Summary

Issues:
1. Liquidation order sought by Resolution Professional under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016.
2. Extension of Corporate Insolvency Resolution Process (CIRP) period beyond 180 days.
3. Rejection of Resolution Plans by Committee of Creditors (CoCs).
4. Liquidation process and appointment of Company Liquidator.
5. Powers and duties of the Company Liquidator.

Analysis:
1. The Resolution Professional filed an application seeking a liquidation order for the Corporate Debtor, M/s. Ashok Magnetics Limited, as the Resolution Plans submitted were not approved by the CoCs within the stipulated time frame. The Adjudicating Authority, under Section 33(1)(a) of the Code, proceeded to pass a liquidation order due to the absence of any approved Resolution Plan.

2. The Resolution Professional, based on the CoCs' recommendation, requested an extension of the CIRP period beyond 180 days. The Authority granted a 90-day extension, which expired on 01.06.2018, leading to the initiation of liquidation proceedings as per Section 33(1)(a) of the Code.

3. The Resolution Plans submitted by two qualified Resolution Applicants were not accepted by the CoCs due to low offers, undervaluation of assets, and a commercial decision. As no Resolution Plan was approved within the specified timeline, the liquidation process was initiated as per Section 33(1)(a) of the Code.

4. The Adjudicating Authority ordered the liquidation of the Corporate Debtor, appointed the Resolution Professional as the Company Liquidator, and directed the cessation of moratorium under Section 14 of the Code. The Liquidator was authorized to manage the affairs of the Corporate Debtor, and the personnel were instructed to cooperate during the liquidation process.

5. The Company Liquidator was granted powers and duties as specified in the Code and regulations, including the authority to charge fees for conducting the liquidation proceedings. The Liquidator was permitted to continue the operations of the Corporate Debtor and dispose of assets as a "going concern" basis, ensuring compliance with the legal procedures outlined in the Code and related regulations.