2019 (9) TMI 331 - AT - Insolvency and Bankruptcy

Liquidation - absence of any approved plan - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - No order of settlement can be passed by this Appellate Tribunal, even though the Appellant, promoter agrees to pay all the dues. However, we direct the liquidator to proceed in terms of the decision in Y. SHIVRAM PRASAD AND ASSET RECONSTRUCTION COMPANY (INDIA) LTD. VERSUS S. DHANAPAL ORS. AND SERVALAKSHMI PAPER LTD. ORS 2019 (5) TMI 386 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI wherein a detailed order has been passed as to how the liquidator should proceed - appeal disposed off.

Summary

Issues: Liquidation order under Section 33(2) of the Insolvency and Bankruptcy Code, 2016; Settlement with promoters and creditors; Possibility of saving the Corporate Debtor under Section 230 of the Companies Act, 2013; Prohibition on sale or transfer of Corporate Debtor's property; Precedents regarding liquidator's actions.

The judgment pertains to an appeal filed by a shareholder against a liquidation order issued by the Adjudicating Authority under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The appellant claimed that a substantial amount was already settled, but the resolution process did not allow further settlements with promoters and creditors. The appellant suggested that the Corporate Debtor could potentially be saved under Section 230 of the Companies Act, 2013. An interim order was passed to prevent the liquidator or Adjudicating Authority from dealing with the Corporate Debtor's assets. The Appellate Tribunal referenced previous cases like "S.C. Sekaran v. Amit Gupta & Ors." and "Y. Shivram Prasad Vs S. Dhanapal & Ors." to guide the liquidator's actions. Despite the appellant's willingness to clear all dues, the Tribunal emphasized that no settlement order could be granted, directing the liquidator to proceed as per the established precedents. The appeal was disposed of with these directions, and no costs were awarded.