2019 (2) TMI 2013 - Tri - Companies Law

Validity of decision of the COC to initiate liquidation rather than consider their proposal put forth for reconsideration - HELD THAT - It was resolved by e-voting that the assets of the Corporate Debtor be liquidated under Section 33(2) of IBC. The said approval has been granted by 88.92 per cent of voting power of the COC. It is also submitted on behalf of the RP that the period of 270 days expired on 10.02.2019. Under such circumstances, no further proposal of the resolution applicant can be taken into consideration. Given the averments made in the said application, which is duly annexed with the resolution and the affidavit of the RP, this application merits consideration. The resolution of the COC to reject the RA's proposal and proceed with liquidation is hereby approved. Application disposed off.

Summary

Issues:
1. Objection to COC's decision to initiate liquidation instead of reconsidering the proposal by the resolution applicant.
2. Application under Section 33(2) of the Code for initiating liquidation of the Corporate Debtor.
3. Approval of liquidation by 88.92% voting power of the COC.
4. Appointment of Insolvency Liquidator and direction to file interim reports.

Analysis:
1. The judgment addresses the issue of the resolution applicant objecting to the Committee of Creditors (COC) decision to initiate liquidation instead of reconsidering their proposal. The COC rejected the proposal by 88.90% voting power and resolved for liquidation under Section 33(2) of the Insolvency and Bankruptcy Code (IBC). The Tribunal approved the COC's decision, stating that no further proposal can be considered after the 270-day period expired, and the resolution applicant's objection was dismissed.

2. Another issue dealt with in the judgment is the application filed under Section 33(2) of the Code for initiating the liquidation of the Corporate Debtor. The application, supported by an affidavit of the Resolution Professional (RP), highlighted the rejection of the resolution applicant's proposal by the COC and the approval of liquidation by 88.92% of the voting power. The Tribunal upheld the decision to proceed with liquidation based on the COC's resolution.

3. The judgment confirms the approval of liquidation by 88.92% of the voting power of the COC. This approval was crucial in determining the course of action regarding the Corporate Debtor's insolvency proceedings. The Tribunal acknowledged the validity of the COC's decision and supported the initiation of liquidation as per the provisions of the IBC.

4. Additionally, the judgment addressed the appointment of the Resolution Professional, Mr. Rajesh JhunJhunwala, as the Insolvency Liquidator in the case. The Tribunal confirmed his appointment and directed him to file interim reports in compliance with the insolvency laws. This step ensures proper oversight and management of the liquidation process, emphasizing the importance of timely reporting and adherence to the legal requirements.

Overall, the judgment provides a comprehensive analysis of the issues raised regarding the COC's decision, the application for liquidation, the approval process, and the appointment of the Insolvency Liquidator, ensuring compliance with the relevant provisions of the Insolvency and Bankruptcy Code.