2020 (9) TMI 1077 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(1), 33(2) 34(1) of the Insolvency Bankruptcy Code - HELD THAT - It is noted that the Corporate Debtor was admitted in to Corporate Insolvency Resolution Process - It is found that, no Resolution Plan has been received during Corporate Insolvency Resolution Process nor EOI's have been received. In these circumstances, there remains no other option but to pass an order of Liquidation of the Corporate Debtor and this has also been decided by the Committee of Creditors in its meeting dated 26.09.2019 with 100% voting. Considering the factual situation of the matter and applicable legal provision(s), to be ordered that company to be liquidated. This to be further ordered that the Resolution Professional shall act as 'Liquidator'. Application allowed.

Summary

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

Analysis:
The Interlocutory Application was filed by the Resolution Professional seeking liquidation of the Corporate Debtor under the relevant sections of the Insolvency & Bankruptcy Code. The Corporate Debtor was admitted under Corporate Insolvency Resolution Process, and after the expiry of the initial 180 days, an extension of 90 days was granted. Despite two invitations for expression of interest, no concrete proposals were received, leading the Committee of Creditors (CoC) to decide against extending the process and opting for liquidation.

During the CoC meeting, it was resolved that since no Resolution Plan was received, the liquidation of the Corporate Debtor was recommended with 100% majority. The Resolution Professional was authorized to act as the Liquidator, and the necessary consent was provided. The Liquidator was appointed as per Section 34(1) of the Insolvency & Bankruptcy Code, and all powers of the Board of Directors and key managerial persons ceased to exist, transferring to the Liquidator.

The Liquidator was directed to coordinate with all relevant authorities and provide necessary information for the liquidation process. Legal action to recover trade receivables and other credits was mandated, and a notice of discharge was issued to officers, employees, and workmen of the Corporate Debtor, except for ongoing business operations during liquidation. The moratorium was lifted, and the Liquidator was instructed to follow the liquidation process regulations as specified by the Insolvency and Bankruptcy Board of India.

The order for liquidation was allowed, directing the Liquidator to initiate and complete the liquidation process as per the Code's regulations. The Registry was directed to upload the order on the official website and send copies to relevant parties. The Interlocutory Application seeking liquidation was allowed and disposed of accordingly.