2019 (11) TMI 1691 - Tri - Insolvency and Bankruptcy

Seeking liquidation of Corporate Debtor - section 33 (2) of the IBC, 2016 - HELD THAT - As per provisions of the Section 33 of the Code, the Adjudicating Authority has to pass an order for liquidating the Corporate Debtor in the manner as laid down in the Code, to issue public announcement that Corporate Debtor is in liquidation process etc., provided the Adjudicating Authority, do not receive any Resolution Plan during the time granted by the Adjudicating Authority (180 days 90 days as the case may be) In the instant case, as stated supra, the Resolution Plan submitted by Mr. H.S.Bedi was rejected, and the statutory time granted under the provisions of the Code is available up to 25.09.2019. The instant Application is filed on 24.09.2019 seeking to pass an Order for liquidating the Company u/s 33(1) of the Code, the Resolution for the same was approved by 8th COC held on 23.09.2019, consisting of representatives of State Bank of India, ICICI Bank Limited and L T Infrastructure Finance Company Limited with 92.63% voting in favour, while OBC dissented. M/s. IDEB Projects Pvt. Ltd., Respondent/ Corporate Debtor, is directed to be liquidated in the manner as laid down in Chapter III (Liquidation Process) of Part II of the Code - application allowed.

Summary

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP).
2. Rejection of Expression of Interest (EOI) by Mr. H.S. Bedi.
3. Compliance with Section 29A of the Insolvency and Bankruptcy Code (IBC), 2016.
4. Decision to liquidate the Corporate Debtor.
5. Appointment of Liquidator.
6. Pending Writ Petition by Mr. H.S. Bedi.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The main Company Petition was filed by Oriental Bank of Commerce under Section 7 of the IBC, 2016, seeking to initiate CIRP against the Corporate Debtor, M/s. IDEB Projects Pvt. Ltd., for defaulting an amount of ?36,18,52,994/-. The Adjudicating Authority admitted the petition on 29.03.2019, initiating CIRP and appointing Shri Velayudham Jayavel as the Interim Resolution Professional (IRP), who was later confirmed as the Resolution Professional (RP) by the Committee of Creditors (COC).

2. Rejection of Expression of Interest (EOI) by Mr. H.S. Bedi:
Mr. H.S. Bedi, the suspended Director-Promoter of the Corporate Debtor, submitted his EOI on 28.06.2019. However, the RP rejected the EOI as Mr. Bedi was declared a wilful defaulter by several banks, which was confirmed by the CIBIL database. Despite Mr. Bedi’s contention and a pending Writ Petition challenging his status as a wilful defaulter, the RP maintained the rejection, and the COC ratified this decision in its fourth meeting.

3. Compliance with Section 29A of the Insolvency and Bankruptcy Code (IBC), 2016:
Section 29A of the IBC disqualifies wilful defaulters from submitting a resolution plan. Mr. Bedi's EOI was rejected based on this provision. The Karnataka High Court's interim order allowed Mr. Bedi to submit his proposal, but the COC found his plan non-compliant with the IBC requirements. The Tribunal emphasized that Section 29A, effective from 23.11.2017, applies to Mr. Bedi’s case, justifying the rejection of his resolution plan.

4. Decision to Liquidate the Corporate Debtor:
Despite efforts to find a viable resolution plan, only Mr. Bedi’s non-compliant proposal was received. The COC, in its eighth meeting, decided to liquidate the Corporate Debtor with 92.63% voting in favor, citing the lack of a legally compliant plan and the expiration of the 180-day CIRP period on 25.09.2019.

5. Appointment of Liquidator:
The Tribunal ordered the liquidation of M/s. IDEB Projects Pvt. Ltd. and appointed Shri Velayudham Jayavel as the Liquidator. His appointment was confirmed based on his eligibility and compliance with the IBBI regulations.

6. Pending Writ Petition by Mr. H.S. Bedi:
The Tribunal acknowledged Mr. Bedi’s pending Writ Petition in the Karnataka High Court, which challenges his status as a wilful defaulter. The Tribunal’s order does not preclude Mr. Bedi from seeking further directions from the High Court regarding his eligibility to submit a resolution plan.

Conclusion:
The Tribunal ordered the liquidation of the Corporate Debtor and appointed a Liquidator, directing the issuance of a public announcement and adherence to the IBC provisions. The decision to liquidate was based on the lack of a compliant resolution plan and the statutory time limits. The Tribunal also noted that Mr. Bedi could seek further clarifications from the High Court regarding his Writ Petition. The case was posted for a report from the Liquidator on 11.12.2019.