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2020 (9) TMI 13 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - section 33(1)(a) of the IB Code - difference of opinion - Hon'ble Member (Judicial), Mr. Harihar Prakash Chaturvedi passed order allowing the application filed by the RP under section 33(1)(a) with a specific observation that the RP shall continue as liquidator and shall take steps as provided in the provision of the Code. However, the Hon'ble Member (Technical), Mr. Prasanta Kumar Mohanty has not agreed with the order so passed by the Hon'ble Member (Judicial) and accordingly he has given his different observation/opinion with regard to the admission of the application filed under section 9 of the IB Code. HELD THAT - The instant application i.e. IA 793/2019 deserves to be allowed in view of the decision passed by the Hon'ble Supreme Court in the matter of K. Sasidharan Vs. Indian Overseas Bank Ors. 2019 (2) TMI 1043 - SUPREME COURT where it was held that the commercial wisdom has been exercised by the COC after taking into count all the factors leading to maximisation of asset value of the Corporate Debtor, but the ultimate discretion of what to pay and how to pay each class or sub-class of creditors lies with the COC - The said decision is also relied upon by the Hon'ble Member (Judicial), Mr. Harihar Prakash Chaturvedi, while passing the order. I concur with the order so passed by the Hon'ble Member (Judicial) and accordingly the application so filed by the RP is allowed.
Issues:
1) Assignment of case due to difference of opinion between Hon'ble Members 2) Liquidation application under section 33(1)(a) of the IB Code 3) Disagreement between Hon'ble Members on the admission of the application 4) Application allowed based on Supreme Court judgments on COC's commercial wisdom Analysis: 1) The case was assigned to the current Member due to a difference of opinion between Hon'ble Members regarding a liquidation application under section 33(1)(a) of the IB Code. The matter was extensively heard by both Members, with one allowing the application and the other not agreeing with the decision. The current Member reviewed the orders passed by both Members. 2) The brief facts of the case involve an application filed by the RP seeking liquidation of the Corporate Debtor under section 33(1)(a) of the IB Code. The CIRP was initiated after the admission of the C.P. (IB) 544/2018 filed by the Operational Creditor. The RP subsequently filed an application for liquidation upon completion of the CIRP period. 3) The disagreement between the Hon'ble Members arose from one Member allowing the application while the other Member ordered the issuance of notices for clarification. The current Member, after reviewing the orders and relevant records, found that the application deserved to be allowed based on previous Supreme Court judgments. 4) The current Member concurred with the decision of the Hon'ble Member (Judicial) who allowed the application. The decision was based on the Supreme Court's stance that the commercial wisdom of the Committee of Creditors (COC) should not be interfered with by the Adjudicating Authority. The COC's discretion in maximizing the asset value of the Corporate Debtor was highlighted, emphasizing that the ultimate decision on payments to creditors lies with the COC. The current Member allowed the application filed by the RP under IA 793/2019, in line with the previous judgments and disposed of the case accordingly.
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