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2019 (11) TMI 841 - Tri - Insolvency and BankruptcyLiquidation of company - proceedings under CIRP - Resolution Professional submits that no resolution plan was received by him - CoC in the meeting unanimously decided to liquidate the Company. - HELD THAT - RP has complied with the procedure laid under the Code read with Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Regulations), for the valuation report filed by the valuer has not been disputed by the CoC, on verification - this case is fit to pass liquidation order under sub-section 1 of section 33 of the Code as no resolution plan has been approved by the Adjudicating Authority. Resolution Professional is appointed as the Liquidator as provided under section 34(1) of the Code. All powers of the board of 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 with the liquidator - Application allowed.
Issues:
Corporate Insolvency Resolution Process (CIRP) initiation and appointment of Resolution Professional (RP), constitution of Committee of Creditors (CoC), appointment of valuers, receipt of resolution plan, decision for liquidation, appointment of Liquidator, cessation of powers of directors and key personnel, cooperation with Liquidator, fees and charges for liquidation proceedings, legal proceedings during liquidation, discharge of officers and employees. Corporate Insolvency Resolution Process (CIRP) Initiation and Appointment of Resolution Professional (RP): The CIRP was initiated against the Corporate Debtor based on a Section 7 Petition filed by the Financial Creditor. Mr. Vinodkumar P. Ambavat was appointed as Interim Resolution Professional (IRP) and later as Resolution Professional (RP) in the 1st Committee of Creditors (CoC) meeting. The public announcement for submitting claims was made, and the CoC was constituted with Omkara Assets Reconstruction Pvt. Ltd. as the sole member. Appointment of Valuers and Receipt of Resolution Plan: In the 2nd CoC meeting, two registered valuers were appointed as required by regulations, and the Information Memorandum was prepared. Despite inviting Expression of Interest, no resolution plan was received, leading to the unanimous decision to liquidate the company in the 4th CoC meeting. The RP agreed to act as the Liquidator for the liquidation process. Decision for Liquidation and Appointment of Liquidator: With no resolution plan approved, the CoC decided to liquidate the company with 100% voting. The RP was appointed as the Liquidator, and the Bench ordered the liquidation process to commence. The Liquidator's fee was fixed, and all powers of the Board of Directors and key personnel ceased to exist, transferring to the Liquidator. Cooperation with Liquidator and Legal Proceedings: Personnel of the Corporate Debtor were directed to cooperate with the Liquidator during the liquidation process. Legal proceedings against the Corporate Debtor were restricted during liquidation, except those initiated by the Liquidator with prior approval. The liquidation order discharged officers, employees, and workmen, except for ongoing business managed by the Liquidator. Fees and Charges for Liquidation Proceedings: The Liquidator would charge fees based on the value of the liquidation estate assets, payable from the proceeds of the liquidation estate. The liquidation process was to follow the regulations provided by the Insolvency & Bankruptcy Board of India. Conclusion: The judgment allowed the Liquidator to initiate the liquidation process under Chapter-III of the Code, following the regulations for liquidation proceedings. It emphasized the transfer of powers to the Liquidator, cooperation required from Corporate Debtor personnel, restrictions on legal proceedings, and the fee structure for the Liquidator.
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