2020 (10) TMI 266 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(1) and 33(2) of the IB Code - HELD THAT - There are no reason to adjourn the matter on the request of the Suspended Management, who has no role as of now. More so, if at all, Suspended Management wishes to file any objection or any representation, they could have done it just after passing of the resolution by the Committee of Creditors for liquidation of Corporate Debtor - Under such circumstances, the matter cannot be adjourned. Liquidation ordered - moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation.

Summary

Issues: Application under Section 33(1) and 33(2) of the IB Code for liquidation of Corporate Debtor

Analysis:
- The application was filed under Section 33(1) and 33(2) of the Insolvency and Bankruptcy Code (IBC) for the liquidation of the Corporate Debtor.
- The Committee of Creditors (CoC) passed a resolution for liquidation on 29.01.2020, which was duly notified to the Suspended Management and CoC.
- The Suspended Management requested time to file a reply/representation through a proxy, even though they were present during the CoC meeting where the resolution was passed.
- The Adjudicating Authority found no reason to adjourn the matter as the Suspended Management had not filed any objection or representation since the resolution was passed.
- The Adjudicating Authority highlighted that it has no jurisdiction to interfere in the commercial wisdom of the CoC, citing legal precedents.
- The resolution for liquidation was passed unanimously by the CoC as no viable resolution plan was received from any Resolution Applicant.
- The Adjudicating Authority ordered the cessation of moratorium, issuance of public announcement for liquidation, and transfer of powers to the Liquidator.
- Legal proceedings against the Corporate Debtor were restricted, with exceptions as notified by the Central Government in consultation with financial regulators.
- The Liquidator was directed to manage the affairs of the Corporate Debtor, with assistance from its personnel, and charge fees as specified.
- The Company Liquidator's powers and duties were outlined as per the IBC and related regulations.
- The Registry was instructed to communicate the order to relevant authorities promptly.

Therefore, the application under Section 33(1) and 33(2) of the IBC for the liquidation of the Corporate Debtor was allowed, and the matter was disposed of accordingly.