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2019 (7) TMI 1249 - Tri - Insolvency and BankruptcyIssuance of directions for liquidation of the corporate debtor - Section 33 (1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the factual background and in the absence of any resolution plan and for want of time beyond statutory CIRP period; there is no other alternative but to order in conformity with the required majority decision of the CoC for liquidation of the corporate debtor under Section 33 of the Code - The Resolution Professional has submitted its written consent by filing an affidavit, in Form AA under the Code, to be appointed as Liquidator in the present case. The application is allowed by ordering liquidation of the corporate debtor, namely Shilpi Cable Technologies Limited.
Issues:
1. Application for liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016. 2. Validity of valuation reports and appointment of valuers. 3. Consideration of resolution plans by Committee of Creditors (CoC). 4. Decision on liquidation in the absence of successful resolution plan. 5. Appointment of Liquidator and directions for the liquidation process. Issue 1: Application for Liquidation The application was filed by the Resolution Professional under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the corporate debtor, Shilpi Cable Technologies Limited. The application was a result of the expiration of the Corporate Insolvency Resolution Process (CIRP) without any successful resolution plan. Issue 2: Validity of Valuation Reports The Resolution Professional appointed registered valuers to determine the liquidation value of the corporate debtor, as mandated by the Insolvency and Bankruptcy Board of India (IBBI) regulations. Despite objections raised regarding the decrease in asset value, the appointment of valuers was found to be in compliance with statutory requirements, and no grounds were established for fresh valuation reports. Issue 3: Consideration of Resolution Plans Multiple resolution plans were submitted and evaluated by the Committee of Creditors (CoC) following the prescribed procedures. Despite initial rejections and modifications, the CoC eventually selected a consortium as the highest bidder. However, the resolution plan was not approved by the requisite majority, leading to the decision to reinitiate the liquidation process. Issue 4: Decision on Liquidation With the absence of a successful resolution plan within the statutory CIRP period, the CoC, with a significant vote share, directed the Resolution Professional to file for liquidation under Section 33 of the Code. The Tribunal, in line with the CoC's decision, ordered the liquidation of the corporate debtor and appointed a Liquidator to oversee the process. Issue 5: Appointment of Liquidator and Process The Tribunal appointed the Resolution Professional as the Liquidator and issued directions for the commencement of the liquidation process in accordance with the provisions of the Insolvency and Bankruptcy Code. The Liquidator was tasked with various responsibilities, including investigating the financial affairs of the corporate debtor, considering pending claims, and submitting a preliminary report within the specified timeline. This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the application for liquidation, valuation report validity, resolution plan considerations, the decision-making process leading to liquidation, and the subsequent appointment of a Liquidator with specific directives for the liquidation process.
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