2019 (11) TMI 1758 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33 of the IB Code 2016 - HELD THAT - In the instant case the CoC in their second CoC meeting held on 06.05.2019 unanimously resolved to liquidate the Corporate Debtor and authorized the IRP to intimate this Adjudicating Authority as to their decision to liquidate the Corporate Debtor with 100% voting share. This Adjudicating Authority hereby order for Liquidation of M/s. Smartec Build Systems Private Limited which shall be conducted in the manner as laid down in Chapter III of part II of the I B Code 2016 - Application allowed.

Summary

Issues:
1. Application for liquidation filed by the Interim Resolution Professional.
2. Payment of fees and expenses to the Interim Resolution Professional.

Issue 1: Application for Liquidation
The Tribunal considered two applications, IA No. 479/2019 and IA No. 540/2019, filed by the Resolution Professional. IA No. 479/2019 sought an order of Liquidation against the Corporate Debtor and the appointment of the Resolution Professional as a Liquidator. The facts revealed that the Committee of Creditors (CoC) unanimously recommended liquidation due to the non-cooperation of the Suspended Directors and the unascertainable position of the Corporate Debtor's fixed assets. The CoC resolved to liquidate the Corporate Debtor with 100% voting share. The Resolution Professional expressed unwillingness to act as the Liquidator and requested the Financial Creditor to file the petition for liquidation. The Tribunal, in accordance with Section 33(2) of the IBC, 2016, and the decision of the CoC, ordered the liquidation of the Corporate Debtor. The moratorium was lifted, and the powers of the Board of Directors were vested in the Company Liquidator appointed by the Tribunal.

Issue 2: Payment of Fees and Expenses
In IA No. 540/2019, the Resolution Professional sought direction for the payment of fees and expenses incurred during the Corporate Insolvency Resolution Process (CIRP). The Resolution Professional highlighted that certain fees and expenses were pending, and there was apprehension regarding the recovery of future expenses. The Financial Creditor, in response, argued that the Resolution Professional should bear the expenses as per the regulations. However, the Tribunal noted that the CoC had unanimously ratified the fees and expenses payable to the Resolution Professional. Therefore, the Tribunal directed the CoC to make the payment of fees and expenses to the Resolution Professional, considering it as part of the CIRP cost.

The Tribunal's judgment ordered the liquidation of the Corporate Debtor based on the CoC's decision and the provisions of the IBC, 2016. Additionally, it directed the CoC to pay the fees and expenses of the Resolution Professional as ratified unanimously. The matter was scheduled for the appointment of a Liquidator on a future date.