2020 (1) TMI 1544 - Tri - Insolvency and Bankruptcy

Seeking liquidation of Corporate Debtor - HELD THAT - Since no Resolution Plan is received by this Authority under Sub-section (6) of Section 30 of the I B Code, 2016, before the expiry of the maximum period of the Corporate Insolvency Resolution Process, the CD has to be ordered for Liquidation. Application allowed.

Summary

Issues:
1. Misrepresentation in Resolution passed by Committee of Creditors (CoC)
2. Liquidation order for Corporate Debtor (CD) M/s. Newgen Specialty Plastics Ltd.

Issue 1: Misrepresentation in Resolution passed by Committee of Creditors (CoC)
The Tribunal observed that the CoC had passed a resolution for the liquidation of the Corporate Debtor based on misrepresentation. The CoC claimed ignorance about the procedure to be followed for conducting the CoC, which was refuted by the Resolution Professional. The Tribunal highlighted that the CoC, being responsible for commercial decisions, could not plead ignorance of the law. The Tribunal dismissed the application as the CoC had decided to liquidate the Corporate Debtor with 100% voting share, indicating that the arguments of the CoC were deemed far-fetched.

Issue 2: Liquidation order for Corporate Debtor (CD) M/s. Newgen Specialty Plastics Ltd.
The Resolution Professional filed an application seeking a liquidation order for the CD under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The background of the case involved the initiation of the Corporate Insolvency Resolution Process (CIRP) against the CD, appointment of an Interim Resolution Professional (IRP), and subsequent proceedings of the Committee of Creditors (CoC). Despite multiple extensions granted to prospective resolution applicants, no resolution plan was submitted within the stipulated time. Consequently, the CoC unanimously passed a resolution for liquidation through e-voting with 100% voting rights. The Tribunal, in exercise of its powers under the I&B Code, proceeded to pass a liquidation order appointing Mr. Anil Kumar as the Company Liquidator. The order detailed the cessation of powers of the CD's management, the responsibilities of the Company Liquidator, and the necessary steps to be taken during the liquidation process. The Tribunal directed immediate communication of the order to relevant authorities for compliance.

This detailed analysis covers the issues of misrepresentation in the CoC's resolution and the subsequent liquidation order for the Corporate Debtor, M/s. Newgen Specialty Plastics Ltd., as adjudicated by the National Company Law Tribunal, New Delhi.