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2020 (5) TMI 5 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - expiry of CIRP date - section 33 (1) (a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case, the CIRP period is stated to have been expired on 26-7-2019 and no resolution plan under section 30 (6) of the Code was received by the Adjudicating Authority before that date. In fact, an application is received from the RP for liquidation of the corporate debtor, since despite invitation for EOI being issued thrice, no resolution plan was received. Therefore, the order is being passed requiring the corporate debtor to be liquidated in the manner as laid down in Chapter III of the Code and the directions for issue of public announcement stating that the corporate debtor is in liquidation and requiring such orders to be sent to the authority with which the corporate debtor is registered, are being issued. The RP has stated that the Liquidator's fee in terms of Regulation 39 D of the CIRP Regulations, 2016 has been approved by the CoC. Further, the CoC has also recommended that the Liquidator may first explore the sale of the corporate debtor as a going concern in accordance with the Regulation 39 C. It is also stated in the minutes of the 6th meeting of CoC that since the corporate debtor is not a going concern, the sale of assets of corporate debtor shall be in accordance with clause (a) to (d) of the Regulation 32 and was approved by the CoC - thus, he Bench is satisfied that the Corporate Debtor Company is required to be liquidated and accordingly, it is ordered that the Corporate Debtor shall be liquidated. Application allowed.
Issues Involved:
1. Application for liquidation under section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016. 2. Expiry of Corporate Insolvency Resolution Process (CIRP) period without receiving a resolution plan. 3. Approval of liquidation costs and Liquidator's fee. 4. Recommendation for sale of the corporate debtor as a going concern. 5. Appointment of Liquidator. 6. Compliance with Chapter III of the Insolvency and Bankruptcy Code and Liquidation Process Regulations, 2016. Issue-wise Detailed Analysis: 1. Application for liquidation under section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016: The Resolution Professional (RP) filed an application under section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016, seeking an order for the liquidation of M/s. Oswal Spinning & Weaving Mills Limited (Corporate Debtor). The application was necessitated due to the failure to receive a resolution plan within the stipulated CIRP period. 2. Expiry of Corporate Insolvency Resolution Process (CIRP) period without receiving a resolution plan: The Adjudicating Authority admitted the petition under section 7 of the Code and initiated the CIRP for the corporate debtor on 30-10-2018. Despite multiple invitations for Expression of Interest (EOI), no resolution plan was received by the RP by the end of the extended CIRP period, which expired on 26-7-2019. Consequently, the CoC resolved to liquidate the corporate debtor. 3. Approval of liquidation costs and Liquidator's fee: The Committee of Creditors (CoC) approved the estimated liquidation costs as per Regulations 39B and 39D of the CIRP Regulations, 2016, and Regulation 2(1)(ea) of the Liquidation Process Regulations, 2016. The CoC, with a 100% vote share, also approved the Liquidator's fee for the initial three months and for the period used for the sale under clauses (a) and (d) of Regulation 32 of the Liquidation Process Regulations, 2016. 4. Recommendation for sale of the corporate debtor as a going concern: The CoC recommended, with a 100% vote share, that the Liquidator should first explore the sale of the corporate debtor as a going concern under clause (e) of Regulation 32 of the Liquidation Process Regulations, 2016. However, it was noted that the corporate debtor was not a going concern, and the sale of assets should be in accordance with clauses (a) to (d) of Regulation 32. 5. Appointment of Liquidator: The CoC proposed the name of Shri Hemanshu Jetley as the Liquidator, and he consented to act as the Liquidator. The Tribunal verified his credentials and found no adverse information. Consequently, Mr. Hemanshu Jetley was appointed as the Liquidator. 6. Compliance with Chapter III of the Insolvency and Bankruptcy Code and Liquidation Process Regulations, 2016: The Tribunal directed that all provisions and requirements of Chapter III of the Code and Liquidation Process Regulations, 2016, must be strictly complied with. Specific directions included: - Prohibition of suits or legal proceedings against the corporate debtor, except with the Liquidator's approval. - Notice of discharge to officers, employees, and workmen of the corporate debtor, except when the business is continued during liquidation. - All powers of the Board of Directors and key managerial personnel to cease and vest in the Liquidator. - The Liquidator to publish a public announcement within five days of the order, calling stakeholders to submit their claims within 30 days. - The Liquidator to file a preliminary report within 75 days and regular progress reports fortnightly. Conclusion: The Tribunal ordered the liquidation of the Corporate Debtor, M/s. Oswal Spinning & Weaving Mills Limited, in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016, and the Liquidation Process Regulations, 2016. The Liquidator, Mr. Hemanshu Jetley, was directed to take possession of the corporate debtor's assets and proceed with the liquidation process as per the prescribed regulations.
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