2020 (8) TMI 888 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - the approval of the CoC is sought, to liquidate the affairs of the Company under Section 33 of the Code, subject to the approval of this Tribunal - HELD THAT - On reading the Application and the documents enclosed therein, for the IRP has complied with the procedure laid under the Code read with Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, on verification, this is a fit case to pass liquidation order under sub-section 2 of section 33 of the Code as the CoC decided to liquidate the Corporate Debtor. The Corporate Debtor is ordered to be liquidated - application allowed.

Summary

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
2. Resolutions passed in the first meeting of Committee of Creditors (CoC).
3. Submission of claims by financial creditors.
4. Financial position and assets of the Corporate Debtor.
5. Confirmation of the appointment of Resolution Professional (RP).
6. Application for liquidation of the Corporate Debtor under Section 33 of the Code.
7. Appointment of Liquidator.
8. Liquidation order passed by the Tribunal.

Analysis:

1. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a Section 9 Petition filed by the Financial Creditor, leading to the appointment of an Interim Resolution Professional (IRP) by an order dated 17.09.2019.

2. In the first meeting of the Committee of Creditors (CoC) held on 22.10.2019, three resolutions were passed, including the decision to put the Corporate Debtor into liquidation and the appointment of a new Resolution Professional (RP) and liquidator for the company.

3. Only one claim for a specific amount was received from a financial creditor, Prachay Advisors Private Limited, who is the sole member of the CoC, while no claims were received from any other financial creditor.

4. The financial position of the Company was assessed, revealing critical information such as the absence of assets at the Company's premises, removal of assets due to non-payment of rent, lack of employees, and minimal balance in the bank accounts.

5. The Tribunal confirmed the appointment of the applicant as the RP for the Corporate Debtor through an order dated 07.11.2019.

6. Due to the CoC's decision foreseeing no chance of a resolution plan, an application for the liquidation of the Corporate Debtor under Section 33 of the Code was filed, seeking approval from the CoC and the Tribunal.

7. Mr. UdayShreeramSakrikar, the Resolution Professional, consented to act as the Liquidator for the Corporate Debtor.

8. The Tribunal, after considering the submissions and compliance with the Code and regulations, passed a liquidation order directing the liquidation process to be initiated, appointing the RP as the Liquidator, transferring powers to the Liquidator, and outlining the procedures for the liquidation process in accordance with the Code and regulations.