2018 (5) TMI 1032 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Held that - Hereby ordered the Corporate Debtor to be liquidated in the manner as laid down in chapter 3 of IBC Code, 2016; Subject to Section 52 of the I&B Code, no suit (or) other legal proceedings shall be instituted by or against the Corporate Debtor provided that suit or other legal proceedings may be instituted by the liquidator on behalf of the Corporate Debtor with a prior approval of the Adjudicating Authority (ii) Hereby appointed Dr. K.V. Srinivas as Liquidator (iii) The Liquidator is also directed to submit preliminary report within 75 days from liquidation commencement date as per Rule 13 of IBBI, 2016 (iv) All the Directors, key managerial personnel and the partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator. And the personnel of the Corporate Debtor are directed to extend all assistance and cooperation to the liquidator as may be required by him in managing the affairs of the Corporate Debtor and provisions of Section 19 shall apply. (v) The Liquidator appointed will be strictly governed by the Insolvency and Bankruptcy Board of India (Liquidation process) Regulations, 2016 as amended from time to time and strict adherence to laws and policies defined.

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Appointment and replacement of Interim Resolution Professional (IRP) and Resolution Professional (RP)
3. Committee of Creditors (CoC) meetings and decisions
4. Viability and approval of Resolution Plans
5. Allegations against the Resolution Professional
6. Liquidation of the Corporate Debtor

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The Company Petition CP(IB) No. 172/10/HDB/2017 was filed by M/s. Super Agri Seeds Private Limited under Section 10 of IBC, 2016, seeking to initiate CIRP. The company had taken various loans from SBI, RBL, and ICICI Bank, and upon failing to repay, SBI initiated SARFAESI proceedings and conducted an e-auction. The petition was admitted on 06.09.2017, and Shri Venkateshwarlu Kari was appointed as the IRP with a moratorium granted on 18.09.2017.

2. Appointment and Replacement of Interim Resolution Professional (IRP) and Resolution Professional (RP):
The IRP issued a public announcement on 23.09.2017 inviting claims from creditors. Various CoC meetings were held, during which the IRP was replaced by Dr. K.V. Srinivas as the RP. The CoC meetings discussed ratification of costs, approval of budgets, and appointment of valuers.

3. Committee of Creditors (CoC) Meetings and Decisions:
Several CoC meetings were conducted, where key decisions were made:
- 1st CoC: Ratification of IRP costs and replacement of IRP.
- 2nd CoC: Replacement of IRP with RP.
- 3rd CoC: Approval of budget and reimbursement of IRP costs.
- 4th CoC: Discussed financial position and potential funding sources.
- 5th CoC: Deliberated on ongoing discussions for the Resolution Plan.
- 6th CoC: Discussed independent Chartered Accountant’s report and decided on a forensic audit.
- 7th CoC: Evaluated the prospects of revival and unanimously resolved not to seek an extension of the CIRP beyond 180 days.

4. Viability and Approval of Resolution Plans:
Despite efforts, no viable Resolution Plan acceptable to the CoC was received. The CoC unanimously decided to seek liquidation under Sections 33(1)(a) and 34(1) of IBC, 2016, as no resolution plans satisfying the CoC were forthcoming.

5. Allegations Against the Resolution Professional:
The Corporate Debtor raised several contentions against the RP, alleging bias and lack of effort in finding a resolution plan. However, the tribunal found these contentions untenable, noting that the RP and CoC had made substantial efforts, and the allegations were to be addressed by the IBBI.

6. Liquidation of the Corporate Debtor:
The tribunal, exercising powers under Sections 33 and 34 of IBC, 2016, ordered the liquidation of the Corporate Debtor. Dr. K.V. Srinivas was appointed as the Liquidator, and he was directed to submit a preliminary report within 75 days. The tribunal also outlined the process for public announcements and submission of claims by stakeholders.

Conclusion:
The tribunal concluded that no viable resolution plan was received within the statutory period, and the CoC had unanimously resolved in favor of liquidation. Therefore, the tribunal ordered the liquidation of the Corporate Debtor in accordance with the provisions of IBC, 2016.

← Previous Next →