2020 (10) TMI 1297 - Tri - Insolvency and Bankruptcy

Seeking for issuance of directions for liquidation to Corporate Debtor - Section 33(1) of the Insolvency and Bankruptcy Code 2016 - HELD THAT - In accordance with Regulation 27 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation 2016 ( CIRP Regulations ) the erstwhile IRP had appointed two registered valuers i.e. Mr. Lakhan Lal Gupta and Mr. Vijay Vinod Bhatia to determine the liquidation value of the Corporate Debtor in accordance with Regulation 35 of CIRP Regulations - in the same meeting the RP had submitted the estimated liquidation value of the assets of the CD based on the valuation reports obtained from the valuers is approximately Rs. 18, 40, 85, 597/- as per the report of the valuers. The application is allowed by ordering liquidation of the corporate debtor namely M/s.Marga Industries.

Issues:
1. Application for issuance of directions for liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016.
2. Admittance of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
3. Constitution of Committee of Creditors (CoC) and appointment of Resolution Professional.
4. Repeated issuance of Expression of Interest (EoI) during CIRP.
5. Approval for extension of CIRP period and fresh EoI invitation.
6. Submission of Resolution Plan found non-compliant.
7. Decision for liquidation process by CoC and fixation of fee payable to the Liquidator.
8. Appointment of valuers to determine liquidation value of the Corporate Debtor.
9. Submission of estimated liquidation value of assets.
10. Order for liquidation with specific directions.

Analysis:
1. The judgment pertains to an application filed by the Resolution Professional under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the Corporate Debtor, M/s. Mrgra Industries Limited. The Tribunal considered the application for issuance of directions for liquidation in accordance with the provisions of the Code.

2. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was initiated following the admission of an application under Section 7 of the Code by a financial creditor. The Tribunal appointed an Interim Resolution Professional (IRP) to oversee the proceedings, and subsequent steps were taken, including the constitution of the Committee of Creditors (CoC).

3. Throughout the CIRP, various actions were taken, such as the repeated issuance of Expression of Interest (EoI) to invite potential resolution applicants. Despite these efforts, the Resolution Plan submitted was found to be non-compliant with the requirements, leading to the CoC's decision to explore the liquidation process for the Corporate Debtor.

4. The CoC, in its meeting, passed resolutions in accordance with the relevant regulations, fixing the fee payable to the Liquidator and authorizing necessary actions. Additionally, valuers were appointed to determine the liquidation value of the Corporate Debtor, and the estimated value of assets was submitted by the Resolution Professional.

5. Ultimately, the Tribunal ordered the liquidation of the Corporate Debtor, M/s. Mrgra Industries Limited, and provided specific directions, including the appointment of a Liquidator, communication of the order to relevant authorities, commencement of a fresh Moratorium, investigation of financial affairs, disposal of pending applications, and submission of reports within specified timelines. The judgment encompassed detailed procedural aspects and regulatory compliance in the context of insolvency proceedings.

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