2020 (11) TMI 847 - Tri - IBC

Liquidation of Corporate Debtor - section 33 34 of the Insolvency and Bankruptcy Code, 2016 - exemption of Lockdown period from the filling of the instant application - HELD THAT - It is found that there is no possibility of receiving any Resolution Plan. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Sixth meeting dated 17.02.2020. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC as observed in K. Sasidhar's case 2019 (11) TMI 731 - SUPREME COURT . The Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Neuromed Imaging Centre Private Limited - Application allowed.

Summary

Issues:
Liquidation of Corporate Debtor under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016; Exemption of Lockdown period from filing application.

Analysis:
The case involved an application filed by the Resolution Professional (RP) of the Corporate Debtor seeking liquidation under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016, and exemption of the Lockdown period from the application filing. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the Committee of Creditors (CoC) decided for the replacement of the Interim Resolution Professional (IRP) with a new RP. The CoC further resolved for an extension of 90 days beyond the initial 180 days of CIRP, leading to a decision for liquidation as no Resolution Plan was forthcoming.

The Tribunal, after considering the facts and records, noted the CoC's decision for liquidation and emphasized its lack of jurisdiction to interfere in the commercial wisdom of the CoC. Citing relevant legal precedents, the Tribunal highlighted that the commercial wisdom of the CoC is paramount in such matters, and the Adjudicating Authority cannot reverse it. Therefore, the Tribunal passed orders for the cessation of the moratorium, issuance of a public announcement for liquidation, and other necessary directions for the Liquidator.

The Tribunal's orders included the transfer of powers from the Board of Directors to the Company Liquidator, restrictions on legal proceedings against the Corporate Debtor, and instructions for the Liquidator's conduct during the liquidation process. The Liquidator was directed to manage the affairs of the Corporate Debtor, with the personnel required to provide cooperation. The Tribunal also specified the Liquidator's fee structure and directed communication of the order to relevant authorities for compliance.

Conclusively, the Tribunal allowed the application for liquidation, appointing the RP as the Liquidator for the Corporate Debtor. The exemption of the Lockdown period from the application filing was granted, and the Tribunal partially allowed and disposed of the application accordingly.