2020 (1) TMI 1564 - Tri - Companies Law

Seeking Liquidation of Corporate Debtor - Section 33(1) and 33(2) of the code - HELD THAT - The provisions of Section 33(l)(a)(i) make it amply clear that if no Resolution Plan is received within the statutory timeline stipulated under Section 12 of the IBC 2016, it is mandatory for this Tribunal to Order Liquidation of the Corporate Debtor. The Application is allowed, ordering Liquidation of the Corporate Debtor.

Summary

Issues involved:
Application for liquidation under Sections 33(1)(a) and 33(2) of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The case involved an application filed by the Resolution Professional seeking liquidation of the Corporate Debtor under Sections 33(1)(a) and 33(2) of the Insolvency and Bankruptcy Code, 2016. The application was based on the fact that no Resolution Plan was received within the statutory timeline stipulated under Section 12 of the Code. The Resolution Professional had made efforts to invite Expression of Interest (EOI) but did not receive any, leading to the decision to seek liquidation. The Committee of Creditors (CoC) had previously replaced the Interim Resolution Professional with a new Resolution Professional, and subsequently, the Resolution Professional sought extension of the Corporate Insolvency Resolution Process (CIRP) period, which was granted by the Tribunal. Despite extending the deadlines for submission of EOI and Resolution Plan, no viable proposals were received, prompting the Resolution Professional to propose liquidation to the CoC, which was rejected. As per the provisions of Section 33(l)(a)(i) of the Code, in the absence of a Resolution Plan within the stipulated timeline, the Tribunal is mandated to order liquidation of the Corporate Debtor.

The Tribunal, after considering the submissions and facts of the case, allowed the application and ordered the liquidation of the Corporate Debtor, M/s. Kaliber Associates Pvt. Ltd. The Resolution Professional was appointed as the Liquidator, with specific directions laid down for the liquidation process in accordance with the Insolvency and Bankruptcy Code, 2016, and relevant regulations. The Order included directions for the issuance of a Public Announcement, cessation of the Moratorium under Section 14, commencement of a fresh Moratorium under Section 33(5), discharge of officers, employees, and workmen of the Corporate Debtor, investigation of financial affairs, submission of reports, communication to stakeholders, and updating of records with regulatory authorities. The case was disposed-off in accordance with the terms outlined in the Order, marking the conclusion of the proceedings related to the liquidation application.

In conclusion, the judgment highlighted the procedural aspects and legal obligations concerning the liquidation process under the Insolvency and Bankruptcy Code, 2016. It emphasized the importance of adherence to statutory timelines, the role of the Resolution Professional, the decision-making authority of the Committee of Creditors, and the Tribunal's duty to order liquidation in the absence of a viable Resolution Plan within the specified period. The detailed directions provided in the Order aimed to ensure a smooth transition into the liquidation phase while safeguarding the interests of stakeholders and maintaining regulatory compliance throughout the process.