2021 (9) TMI 1371 - Tri - Companies Law

Seeking replacement of Liquidator - Applicant submits that the Liquidator can be replaced under Section 60 (5) of IBC read with Rule 11 of the NCLT Rules - HELD THAT - It is found that the Stake claimed to the extent of 75 % in the SCC is not borne out of the facts as revealed by the Counsel for the Liquidator. Moreover, no exceptional circumstances have been made out in the Application which would warrant the change of Liquidator using the inherent powers under Rule 11 of NCLT Rules, 2016. The prayer of the Applicant to replace the Liquidator is hereby rejected - Application dismissed.

Summary

Issues:
- Replacement of Liquidator
- Conduct of Liquidation Proceedings
- Consultation with Stakeholders Committee
- Consent vote by Liquidator
- Sharing of information with Stakeholders Committee
- Quashing of sales made by Liquidator
- Transparency in sales of assets and claims

Replacement of Liquidator:
The Applicant sought to replace the Liquidator and appoint a new one for conducting the liquidation proceedings of a company. The Applicant claimed to be a stakeholder to the extent of 75% in the Corporate Debtor, but the record showed otherwise. The Tribunal found no exceptional circumstances to warrant the change of Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) read with Rule 11 of the NCLT Rules. Consequently, the prayer to replace the Liquidator was rejected.

Conduct of Liquidation Proceedings:
The Applicant also requested the Liquidator to conduct the proceedings in accordance with the legislative intent of the IBC, 2016, and Regulations, 2016, with fairness and transparency. However, since this request was related to the replacement of the Liquidator, it was also rejected along with the main prayer.

Consultation with Stakeholders Committee:
Another prayer involved directing the Liquidator to consult and seek advice from the Stakeholders Committee regarding the sale of assets and actionable claims of the company. The Tribunal did not address this specific prayer individually but rejected it along with the main request for replacing the Liquidator.

Consent Vote by Liquidator:
The Applicant sought a minimum 66% consent vote on actions taken by the Liquidator, with reasons to be recorded if not followed. This request was linked to the replacement of the Liquidator and was consequently rejected by the Tribunal.

Sharing of Information with Stakeholders Committee:
The Applicant requested the Liquidator to share all information and documents with the members of the Stakeholders Committee. This request was also rejected in line with the rejection of the main prayer for replacing the Liquidator.

Quashing of Sales Made by Liquidator:
The Applicant sought to quash certain sales made by the Liquidator to a successful bidder through E-Auctions. The Tribunal did not find merit in this request and rejected it along with the primary prayer for replacing the Liquidator.

Transparency in Sales of Assets and Claims:
Lastly, the Applicant requested the Liquidator to conduct the sales of assets and claims with complete transparency and fairness. This request was also rejected by the Tribunal as it was connected to the main prayer for replacing the Liquidator.

In conclusion, the Tribunal dismissed the Interlocutory Application (IA) seeking various reliefs related to the Liquidator and the conduct of liquidation proceedings, as the Applicant's claims were not supported by the facts and did not present exceptional circumstances justifying the replacement of the Liquidator.