2020 (8) TMI 931 - AT - Insolvency and Bankruptcy

Direction to Resolution Professional to produce details of assets of the 'Corporate Debtor' along with the valuation report by two valuers within four weeks - HELD THAT - The 'Corporate Debtor' is not a going concern and there being no resolution plan, the 'Committee of Creditors' has unanimously decided to send the 'Corporate Debtor' into the liquidation. Once the application under Section 33 of the 'I B Code' was moved before the Adjudicating Authority, in the given circumstances, it was left with no option but to order the liquidation of the 'Corporate Debtor'. Collecting of material in regard to the assets of the 'Corporate Debtor' and valuation reports etc. is not germane to the disposal of the application under Section 33 of the 'I B Code'. Since the impugned order suffers from legal infirmity, same cannot be supported, the same is set aside with direction to the Adjudicating Authority to dispose of the application of the 'Resolution Professional' under Section 33 of the 'I B Code' within a week's time. Appeal disposed off.

Summary

Issues:
- Impugned order directing Resolution Professional to produce details of assets of the 'Corporate Debtor' along with the valuation report.
- Applicability of Section 33 (2) of the Insolvency and Bankruptcy Code, 2016 for liquidation.
- Committee of Creditors' recommendation for liquidation.
- Lack of resolution plan for the 'Corporate Debtor.'
- Legal infirmity in the impugned order.

Analysis:
The judgment by the National Company Law Appellate Tribunal, New Delhi, dealt with the appeal against an order passed by the Adjudicating Authority directing the Resolution Professional to provide details of the 'Corporate Debtor's assets and a valuation report. The Appellant argued that the Committee of Creditors had recommended liquidation by unanimous vote, invoking Section 33 (2) of the Insolvency and Bankruptcy Code, 2016, leaving no option for the Adjudicating Authority but to order liquidation. The Resolution Professional confirmed the liquidation application's filing based on the Committee's decision, as the 'Corporate Debtor' was not a going concern and lacked a resolution plan.

The Tribunal noted that in the absence of a resolution plan and with the Committee of Creditors opting for liquidation, the Adjudicating Authority had no choice but to order liquidation upon the Section 33 application. The collection of additional material regarding the 'Corporate Debtor's assets and valuation reports was deemed irrelevant to the liquidation decision under Section 33 of the I&B Code. Consequently, due to the legal infirmity in the impugned order, the Tribunal set aside the order and directed the Adjudicating Authority to dispose of the Resolution Professional's application under Section 33 of the I&B Code within a week.

In conclusion, the appeal was disposed of, and a copy of the order was to be promptly sent to the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench.