2020 (9) TMI 652 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - J K Bank with 20.71% vote share voted for the extension of period of CIRP. The Yes Bank however could not vote on the agenda on account of their internal issues of the appointment of an Administrator for the Bank. They could not decide on the said agenda as they did not have a mandate to take any decision due to the restructuring that was underway. Therefore, Yes Bank requested for deferring the issue. Thus, the view of the majority vote share holder was not available. Hence, the scheduled meeting was, after consultation with CoC members, adjourned to 13.06.2020 - The adjourned meeting was convened on 13.06.2020 through a conference call and the Resolution for liquidation of Corporate Debtor was adopted with 100% vote share and the RP was authorised to make necessary Application in that regard. The Applicant submits as the lockdown due to Covid-19 was continuing, the resolution passed in the adjourned meeting convened on 13.06.2020 be considered as a part of the meeting originally scheduled on 11.03.2020. The Applicant Resolution Professional has given his consent to act as Liquidator. However, it is noticed that the proposed fee of the Liquidator has been rejected by the CoC. The Applicant who was present during the virtual hearing submitted that he is ready and willing to work as Liquidator on the fees provided as per the IBBI Regulations. This Bench is satisfied that this Application is in consonance with section 33(2) of the Code. Orders for liquidation of the Corporate Debtor needs to be passed - application allowed.

Summary

Issues: Application for liquidation of Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.

In this case, the National Company Law Tribunal, Mumbai Bench, received an application from the Resolution Professional seeking orders for the liquidation of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and the Committee of Creditors (CoC) was constituted. The CoC members discussed the possibility of liquidation due to the lack of physical assets generating future earnings. The CoC meetings involved debates on extending the CIRP period and seeking further Expressions of Interest (EoI). The majority vote share holder was unable to participate in one of the meetings due to internal issues, leading to an adjournment. Eventually, in a subsequent meeting, the resolution for liquidation was passed unanimously, and the Resolution Professional was authorized to proceed with the liquidation process. The Resolution Professional consented to act as the Liquidator, but there were issues regarding the proposed fee, which was rejected by the CoC. The Tribunal, after considering the submissions and being satisfied with the application's compliance with the Code, ordered the liquidation of the Corporate Debtor. The Tribunal provided detailed directions for the liquidation process, including the appointment of the present Resolution Professional as the Liquidator, cessation of the moratorium, transfer of powers to the Liquidator, and compliance with relevant regulations. The Order also specified the entitlement of the Liquidator to fees and the cooperation required from personnel connected with the Corporate Debtor during the liquidation process. The Order was deemed a notice of discharge for the Corporate Debtor's officers, employees, and workmen, except when the business is continued during liquidation. Copies of the Order were to be furnished to relevant authorities and parties involved.