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2020 (10) TMI 542 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - no resolution plan could be accepted - Section 33 and 34 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since allegations have been made against the Liquidator by some of the Creditors, it is made clear that Resolution Professional is only a Facilitator and he is not the deciding authority for the claims and it is only the CoC who decides the claim. Therefore, I do not find any reason to differ from the decision of the CoC not to appoint Mr. Nitin H Parikh as the Liquidator of the Corporate Debtor - In case some of the Operational Creditors who have complained against the proposed Liquidator, they may refer the matter to the IBBI as IBBI is the Regulator for all Insolvency Professionals registered with them for their investigations and doing the needful at their end. Liquidation of the Corporate Debtor is allowed - application allowed.
Issues Involved:
1. Application for liquidation under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016. 2. Appointment and conduct of the Resolution Professional (RP) as Liquidator. 3. Allegations against the Resolution Professional by creditors. 4. Role and powers of the Committee of Creditors (CoC) and Adjudicating Authority in appointing the Liquidator. Issue-wise Detailed Analysis: 1. Application for Liquidation under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016: The Resolution Professional filed I.A. No. 89 of 2018 under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016, seeking liquidation of the Corporate Debtor due to the non-acceptance of any resolution plan. The Financial Creditor had initiated the Corporate Insolvency Resolution Process (CIRP) under Section 7, with an admission order passed on 23.05.2017, declaring a moratorium and appointing Mr. Nitin Hasmukhlal Parikh as the Interim Resolution Professional (IRP), later confirmed as the Resolution Professional (RP). Despite extensions and inviting expressions of interest, no acceptable resolution plan emerged, leading the CoC to recommend liquidation. 2. Appointment and Conduct of the Resolution Professional (RP) as Liquidator: The RP, Mr. Nitin Hasmukhlal Parikh, was recommended by the CoC to be appointed as the Liquidator. The Tribunal ordered the liquidation of the Corporate Debtor and appointed Mr. Parikh as the Liquidator, as per Section 34(1) of the Code. The Tribunal emphasized that upon the appointment of the Liquidator, all powers of the Board of Directors and key managerial personnel would vest in the Liquidator, and the personnel of the Corporate Debtor must cooperate with the Liquidator as required under Section 19. 3. Allegations Against the Resolution Professional by Creditors: Some creditors, specifically M/s. Vitol SA (Switzerland), raised allegations against the RP, claiming improper rejection of their claim amounting to ?532.91 crores. The Tribunal noted that the RP does not have adjudicatory powers to reject claims and should only collate and update the list of claims for the CoC's consideration. The Tribunal suggested that the CoC reconsider its decision to appoint Mr. Parikh as the Liquidator due to these allegations to ensure transparency and fairness in the liquidation process. 4. Role and Powers of the Committee of Creditors (CoC) and Adjudicating Authority in Appointing the Liquidator: The Tribunal highlighted the CoC's role in recommending the Liquidator and the Adjudicating Authority's power to replace the Liquidator under Section 34(4) if necessary. The Tribunal directed the CoC to reconsider its decision and requested the Insolvency and Bankruptcy Board of India (IBBI) to propose two additional names for the Liquidator's position. The CoC was instructed to make a fresh recommendation considering these names and the present RP, ensuring the selection of a deserving and suitable person for the Liquidator role. Conclusion: The Tribunal allowed the application for liquidation, ordered the Corporate Debtor to be liquidated, and appointed Mr. Nitin Hasmukhlal Parikh as the Liquidator. However, due to objections raised by creditors, the Tribunal directed the CoC to reconsider the appointment and requested the IBBI to propose additional candidates for the Liquidator position. The Tribunal emphasized the need for transparency and fairness in the liquidation process and ensured that the CoC's decision aligns with the principles set by the Supreme Court in relevant cases.
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