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2019 (12) TMI 394 - Tri - Companies LawIssuance of directions for liquidation of the corporate debtor - CIRP initiated - Section 21 of the Code read with Regulation 17 of the CIRP Regulations - It has been submitted in the application that despite several advertisements inviting Expression of Interest, no resolution plan in respect of the Corporate Debtor was received by the Resolution Professional - HELD THAT - In the facts and upon failure of resolution process there being no resolution plan and also on expiry of the statutory Corporate Insolvency Resolution Period of 270 days; Liquidation as proposed by the CoC has to follow - In the factual background and in the absence of any resolution plan there is no other alternative but to order in conformity with the majority decision of the Committee of Creditors, for liquidation of the corporate debtor under Section 33 of the Code. The application is allowed by ordering liquidation of the corporate debtor, namely M/s. Mohan Gems and Jewels Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 with certain directions.
Issues:
1. Application for liquidation of the corporate debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. 2. Failure to receive any resolution plan despite multiple invitations for Expression of Interest. 3. Decision for liquidation passed by the Committee of Creditors with 86.07% voting share. 4. Appointment of Liquidator and issuance of necessary directions for the liquidation process. Analysis: The Tribunal received an application from the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the corporate debtor, M/s. Mohan Gems and Jewels Private Limited. The process began with the admission of an application under Section 7 of the Code, leading to the initiation of the Corporate Insolvency Resolution Process against the corporate debtor. The Interim Resolution Professional was appointed, and the Committee of Creditors (CoC) was constituted with four financial creditors. Subsequently, the Resolution Professional appointed registered valuers for asset valuation, and an extension of the Corporate Insolvency Resolution Period was granted by the Tribunal. Despite multiple advertisements inviting Expression of Interest, no resolution plan was received for the corporate debtor. Consequently, the CoC, with 86.07% voting share, passed a resolution for the liquidation of the corporate debtor under Section 33(2) of the Code. The Resolution Professional consented to act as the Liquidator. With the failure of the resolution process and the expiry of the statutory period, liquidation was deemed necessary as per the majority decision of the CoC. The Tribunal, in line with the CoC's decision, ordered the liquidation of the corporate debtor as there was no alternative in the absence of a resolution plan. The Tribunal issued comprehensive directions for the liquidation process, including the appointment of the Liquidator, issuance of a Public Announcement, communication of the order to relevant authorities, commencement of a fresh Moratorium, continuation of the business during liquidation, investigation of financial affairs, disposal of pending suits/applications, recovery of dues, submission of a Preliminary Report, and notification to stakeholders. The Tribunal disposed of the application in accordance with the outlined terms, ensuring a structured liquidation process in compliance with the Insolvency and Bankruptcy Code, 2016.
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