2020 (9) TMI 1033 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - section 33(1), 33(2) and 34(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - From the records, it is found that no viable and feasible Resolution Plan has been received so far and Corporate Debtor has no running business. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its 3rd meeting dated 12.12.2019. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC. The moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation - Liquidator is further directed to issue public announcement stating that the Corporate Debtor is in liquidation - application allowed.

Summary

Issues:
Liquidation of Corporate Debtor under sections 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The judgment pertains to the liquidation of a Corporate Debtor under sections 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP) filed IA No. 41 of 2019 seeking liquidation and the appointment of a Liquidator as no viable Resolution Plans were received, and the Corporate Debtor had no running business. The Committee of Creditors (CoC) had resolved for liquidation as the assets were insufficient to cover the debts. The Adjudicating Authority found no feasible Resolution Plan and noted the CoC's commercial wisdom cannot be interfered with, citing legal precedents. Consequently, the order for liquidation was passed.

The judgment ordered the cessation of the moratorium under Section 14 of the IB Code upon liquidation, directed the Liquidator to issue a public announcement, and mandated sending a certified copy of the order to the relevant authority. Legal proceedings against the Corporate Debtor were prohibited, except those initiated by the Liquidator with prior approval. The order clarified that certain legal proceedings exempted by the Central Government were not covered. The Liquidator assumed control over the Corporate Debtor's affairs, with the cooperation of personnel mandated. The Liquidator was entitled to charge fees based on the liquidation estate assets' value, as specified by the Board. The Registry was instructed to communicate the order to relevant entities promptly.

In conclusion, the IA for liquidation was allowed, and the RP was appointed as the Liquidator for the Corporate Debtor. The judgment emphasized compliance with the directives outlined for the liquidation process.