2020 (10) TMI 224 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Without going into the fact that whether the CoC passed the resolution with requisite percentage of voting or not, based on the mandate of Section 33(1)(a), since no Resolution Plan was received within CIRP period and also considering the fact that 270 days of CIRP period are over, this Bench hereby orders the liquidation of the Corporate Debtor. Corporate Debtor is allowed to be liquidated - application allowed.

Summary

Issues Involved:
1. Liquidation application under Section 33(1) of the Insolvency and Bankruptcy Code, 2016.
2. Extension of Corporate Insolvency Resolution Process (CIRP) period.
3. Appointment of Valuers and Transaction Auditors.
4. Submission of Resolution Plans by Prospective Resolution Applicants.
5. Approval of Liquidator and voting share percentage.
6. Interpretation of voting share percentage for resolution approval.
7. Order for liquidation of Corporate Debtor.

Analysis:

1. The application filed by the Resolution Professional sought orders for the liquidation of the Corporate Debtor under Section 33(1) of the Insolvency and Bankruptcy Code, 2016.

2. The Corporate Insolvency Resolution Process (CIRP) period was extended by 90 days as per the resolution passed by the Committee of Creditors (CoC) in a meeting, allowing the Resolution Professional to seek an extension.

3. Valuers and Transaction Auditors were appointed for the Corporate Debtor with the approval of the CoC, and the Fair Value and Liquidation Value were presented to the CoC members.

4. Despite receiving Expression of Interest (EOI) from Prospective Resolution Applicants, no Resolution Plan was submitted by them within the stipulated time frame.

5. The Resolution Professional submitted the application for liquidation as no Resolution Plan was received within the CIRP period, leading to the decision to liquidate the Corporate Debtor under Section 33(1)(a) of the Code.

6. The CoC passed a resolution to appoint a Liquidator with a voting share percentage of 60.47%, which was contested by the Applicant citing a judgment regarding the calculation of voting shares for resolution approval.

7. The Tribunal, considering the mandate of Section 33(1)(a) and the completion of the CIRP period without receiving a Resolution Plan, ordered the liquidation of the Corporate Debtor, appointing Mr. Bhavesh Rathod as the Liquidator.

8. The consequential directions included the appointment of the Liquidator, issuance of a public announcement, cessation of moratorium, transfer of powers to the Liquidator, and compliance with the Code and Regulations for the liquidation process.

9. The Order also mandated cooperation from personnel connected with the Corporate Debtor and served as a notice of discharge to officers, employees, and workmen, except in cases where the business is continued during the liquidation process.