2019 (5) TMI 1929 - Tri - Insolvency and Bankruptcy

Seeking order requiring the corporate debtor to be liquidated in the manner laid down in the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case, it has been submitted that the last date for submission of resolution plan was extended to 15.04.2019 and no resolution plan was received by that date. The meeting of the COC on 25.04.2019 is stated to be held before the completion of the extended CIRP. The resolution for liquidation of the corporate debtor has been passed with the consent of members of COC representing 100% of voting rights. The conditions provided for in Section 33(2) of the Code being satisfied, order of liquidation is being passed as below. Section 34(1) of the Code inter alia provides that where the Adjudicating Authority passes an order for liquidation of the corporate debtor under Section 33, the RP appointed for the CIRP shall, subject to submission of written consent by the RP to the Adjudicating Authority in specified Form, act as the Liquidator for the purposes of liquidation. In the present case, Shri Anup Kumar Singh, RP has given his consent for acting as Liquidator for the purposes of liquidation of the corporate debtor. Therefore, in view of Section 34 (1) of the Code, the RP is being appointed as the Liquidator. The corporate debtor K.T.C Foods Pvt. Ltd. is directed to be liquidated in the manner as laid down in Chapter III of the Code - Application allowed.

Summary

Issues:
1. Liquidation application filed by Resolution Professional.
2. Replacement of Interim Resolution Professional.
3. Extension of CIRP period and submission of resolution plan.
4. Decision for liquidation due to non-receipt of resolution plan.
5. Appointment of Resolution Professional as Liquidator.
6. Directions for liquidation process and stakeholders' claims submission.
7. Publication of public announcement and filing of reports by Liquidator.
8. Operational Creditors' rights and enforcement of personal guarantees.

Analysis:
1. The judgment pertains to a liquidation application filed by the Resolution Professional (RP) of a Corporate Debtor. The RP sought liquidation as per the provisions of the Insolvency and Bankruptcy Code, 2016 (Code).

2. Initially, an Interim Resolution Professional (IRP) was appointed during the Corporate Insolvency Resolution Process (CIRP). However, the Committee of Creditors (COC) resolved to replace the IRP with a new Resolution Professional, who was subsequently appointed.

3. The CIRP period was extended, and the deadline for submission of resolution plans was also extended. Despite the extensions, no resolution plan was received by the specified date, leading to discussions within the COC regarding the only alternative of liquidation.

4. Following the non-receipt of any resolution plan, the COC approved the liquidation of the Corporate Debtor during a meeting, with the Resolution Professional consenting to act as the Liquidator.

5. The judgment highlights the legal provisions under Sections 33 and 34 of the Code, which govern the process of liquidation and the appointment of the RP as the Liquidator in such cases.

6. Detailed directions were provided for the liquidation process, including the cessation of powers of the Corporate Debtor's management, cooperation requirements from personnel, and the submission of stakeholders' claims within a specified timeframe.

7. The Liquidator was instructed to publish public announcements, file necessary reports within designated timelines, and ensure compliance with the Liquidation Process Regulations, 2016.

8. It was clarified that Operational Creditors retain the right to enforce personal guarantees and take appropriate steps in that regard, ensuring their rights are preserved during the liquidation process.

This comprehensive analysis of the judgment covers the key issues addressed by the Tribunal in the context of the liquidation application and subsequent processes as per the provisions of the Insolvency and Bankruptcy Code, 2016.