2019 (10) TMI 101 - Tri - Insolvency and Bankruptcy

Admissibility of application - initiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor - HELD THAT - As no Resolution Plan has been received by this Authority under Sub-section (6) of Section 30 of the I B Code, 2016, before the expiry of the maximum period of 270 days of CIR Process, the Corporate Debtor has to be ordered for Liquidation. This Authority orders the liquidation of the Corporate Debtor viz., M/s. CT Ramanathan Infrastructure 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 disposed off.

Summary

Issues Involved:
1. Initiation of Liquidation Proceedings under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.
2. Appointment of a Liquidator for the Corporate Debtor.
3. Protection of Liquid Assets of the Corporate Debtor.
4. Handling objections from Bank of Baroda regarding the Supplementary Affidavit.

Issue-wise Detailed Analysis:

1. Initiation of Liquidation Proceedings under Section 33(2) of the Insolvency and Bankruptcy Code, 2016:
The Resolution Professional filed MA/69/2019 in CP/233/IB/2017 seeking to liquidate the Corporate Debtor under Section 33(2) of the I&B Code, 2016. The application was necessitated due to the failure to receive any viable Resolution Plan within the maximum permissible period of 270 days of the Corporate Insolvency Resolution Process (CIRP). The Committee of Creditors (CoC) had unanimously decided to proceed with liquidation after rejecting the sole Resolution Plan submitted by M/s. Sudha Electricals & Enterprise, citing deficiencies and financial viability concerns. Consequently, the Tribunal ordered the liquidation of the Corporate Debtor, M/s. CT Ramanathan Infrastructure Private Limited, as per Chapter III of Part II of the I&B Code, 2016.

2. Appointment of a Liquidator for the Corporate Debtor:
The Tribunal appointed Mr. Pathukasahasram Raghunathan Raman as the Liquidator for the Corporate Debtor. The Liquidator was directed to file a declaration disclosure statement within two working days and issue a public announcement regarding the liquidation. The Tribunal also specified that the moratorium declared under Section 14 of the I&B Code, 2016, would cease from the date of the liquidation order. The Liquidator was vested with all the powers of the Board of Directors, Key Managerial Personnel, and Partners of the Corporate Debtor. The personnel of the Corporate Debtor were instructed to cooperate with the Liquidator.

3. Protection of Liquid Assets of the Corporate Debtor:
During the proceedings, the Resolution Professional highlighted the existence of receivables from the Corporate Debtor's customers, which were deposited with the Debts Recovery Tribunal-2 (DRT-2) along with accrued interest. The Tribunal directed the Liquidator to take custody and control of all assets, properties, and actionable claims of the Corporate Debtor as per Section 35(1)(b) and (d) of the I&B Code, 2016. The Tribunal emphasized that the ?7.50 Crores deposited with DRT-I Chennai and subsequently transferred to DRT-II Chennai formed part of the liquidation estate assets. The Liquidator was instructed to collect this amount and deal with it under Section 53 of the Code, ensuring no preferential payment was made to Bank of Baroda.

4. Handling objections from Bank of Baroda regarding the Supplementary Affidavit:
Bank of Baroda raised objections to the Supplementary Affidavit filed by the Resolution Professional, which sought to protect the receivables of the Corporate Debtor. Despite being directed to file a reply, Bank of Baroda failed to do so and did not appear for representation. The Tribunal noted that Bank of Baroda had filed an application with DRT-2 seeking directions to transfer the sums deposited pursuant to the garnishee order in their favor. The Tribunal reiterated that the Liquidator must recover and realize all assets and dues of the Corporate Debtor in a time-bound manner for the maximization of value for stakeholders, as per regulation 39 of the IBBI (Liquidation Process) Regulations, 2016.

Conclusion:
The Tribunal ordered the liquidation of M/s. CT Ramanathan Infrastructure Private Limited, appointed Mr. Pathukasahasram Raghunathan Raman as the Liquidator, and directed the protection and recovery of the Corporate Debtor's assets. The objections raised by Bank of Baroda were addressed, emphasizing the Liquidator's duty to manage the liquidation estate assets without preferential payments. The Tribunal's order was to be communicated to relevant authorities and the Liquidator for compliance.