2021 (8) TMI 1337 - Tri - Insolvency and Bankruptcy

Liquidation to Corporate Debtor - section 33(2) of the insolvency and Bankruptcy Code, 2016 - HELD THAT - The Committee of Creditors in its 5th CoC meeting held on 24.02.2020 had decided, with 100% voting share, to liquidate the assets of the corporate debtor. In the factual background of the present case, the Resolution Professional proposed, in the 5th CoC meeting, to send the CD into liquidation. Further the CoC have also, after all the discussions and deliberations, resolved to liquidate the Corporate Debtor under Section 33 of the Code. The application is hereby allowed by ordering liquidation of the corporate debtor, namely M/s Radhey Sham Tandon Manufacturing Private Limited - Application allowed.

Summary

Issues:
1. Application for liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016.
2. Decision of the Committee of Creditors (CoC) to liquidate the assets of the Corporate Debtor.
3. Appointment of the Liquidator and related directions for the liquidation process.

Analysis:
1. The Tribunal received an application from the Resolution Professional under section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the Corporate Debtor, M/s. Radhey Sham Tandon Manufacturing Private Limited. The CoC had previously initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, and after thorough deliberations, decided to proceed with liquidation due to the Corporate Debtor's lack of business activity and limited assets.

2. The CoC, in its 5th meeting, unanimously resolved to liquidate the assets of the Corporate Debtor, and subsequently, in the 9th meeting, passed further resolutions with 100% voting share to file a liquidation application before the Tribunal. The Resolution Professional proposed the liquidation in the 5th CoC meeting, and after extensive discussions, the CoC confirmed the decision to liquidate under Section 33 of the Code.

3. The Tribunal allowed the application for liquidation and appointed Mr. Sanjeev Bindal as the Liquidator in accordance with Section 32(1) of the Code. Various directions were issued, including communication of the order to relevant authorities, cessation of the previous moratorium, initiation of a fresh moratorium, discharge notice to employees, commencement of the liquidation process as per the Code, investigation of financial affairs, disposal of pending applications, submission of a Preliminary Report, and notification to concerned parties. Additionally, a related application was disposed of in line with the terms of the liquidation order.