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2020 (5) TMI 271 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - appointment of the liquidator read with rule 11 of the National Company Law Tribunal Rules, 2016 - initiation of CIRP - HELD THAT - As per section 33(1)(a) of the Code, if the resolution professional has not received any resolution plan under section 30(6) with in CIRP period, the Tribunal is left with no other option but to pass a liquidation order. The resolution professional has not filed any resolution plan before this Tribunal under section 30(6) within CIRP period. By relying on section 33(1)(a) of the Code, the resolution professional having not submitted any resolution plan within CIRP period leads to passing an order of liquidation. As per section 34(1) of the Code after passing the order of liquidation of corporate debtor, the resolution professional appointed for CIRP process shall act as the liquidator for conducting the liquidation process - Mr. A. V. S. Krishna Mohan/applicant is appointed as the liquidator. The resolution professional has given his consent for appointing him as a liquidator. The application is allowed and the corporate debtor M/s. Yag Mag Labs P. Ltd., is ordered to be liquidated - The order of moratorium passed under section 14 of the Code shall cease to have its effect.
Issues:
Liquidation of corporate debtor Yag Mag Labs P. Ltd. under sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016. Detailed Analysis: Issue 1: Liquidation Application The resolution professional filed an interlocutory application seeking liquidation of the corporate debtor Yag Mag Labs P. Ltd. under sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016, and the appointment of a liquidator as per rule 11 of the National Company Law Tribunal Rules, 2016. Issue 2: Background and Proceedings The application detailed the history of the case, including the admission of the petition against the corporate debtor, formation of the Committee of Creditors (CoC), and subsequent meetings held to discuss the resolution process. The CoC sought an extension of the resolution process which was granted by the Tribunal. Issue 3: Liquidation Cost Approval The resolution professional presented the estimated liquidation cost to the CoC, which was approved after deliberation as per the provisions of section 39B of the IBC. The liquidation cost included various expenses such as public announcements, valuation fees, audit fees, legal fees, and other expenses. Issue 4: Resolution for Liquidation In the sixth CoC meeting, all members representing 100% of the voting share approved the resolution for liquidating the corporate debtor and appointing the resolution professional as the liquidator. The resolution was passed, and necessary consents and minutes were annexed to the application. Issue 5: Legal Provisions The Tribunal considered sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016. Section 33(1)(a) mandates liquidation if no resolution plan is received within the stipulated period. Section 34(1) appoints the resolution professional as the liquidator after the order of liquidation is passed. Issue 6: Tribunal's Decision As no resolution plan was submitted within the Corporate Insolvency Resolution Process (CIRP) period, the Tribunal ordered the liquidation of the corporate debtor Yag Mag Labs P. Ltd. The resolution professional was appointed as the liquidator to conduct the liquidation process in accordance with the IBBI (Liquidation Process) Regulations, 2016. Issue 7: Further Directions The Tribunal directed the liquidator to issue a public announcement, cease the powers of the corporate debtor's management, and submit a preliminary report within the specified timeline. The order also addressed the payment of fees to the liquidator and the cessation of the moratorium effect. In conclusion, the Tribunal allowed the application for liquidation, ordered the commencement of the liquidation process, and provided specific directions regarding the liquidator's responsibilities and procedures to be followed in accordance with the Insolvency and Bankruptcy Code, 2016.
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