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2020 (12) TMI 240 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - Section 33(2) of the IBC, 2016 - HELD THAT - It is found that there is no asset or Plant Machinery or any inventories or any investments of the Corporate Debtor and neither the Corporate Debtor is carrying on any projects or business operations. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Second meeting dated 12.12.2019. 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 the case of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT . Application filed by the RP under Section 33 of the IB Code, 2016 is allowed and the Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Bansal International Private Limited. The RP i.e. Bhavi Shreyans Shah, shall act as the Liquidator for the purpose of liquidation of the Corporate Debtor.
Issues involved:
Liquidation of Corporate Debtor under Section 33(2) of the IBC, 2016. Analysis: The judgment pertains to an application filed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) for the liquidation of the Corporate Debtor. The case originated from CP (IB) No. 386 of 2019, filed by an Operational Creditor against the Corporate Debtor seeking initiation of Corporate Insolvency Resolution Process (CIRP), which was admitted by the Adjudicating Authority. The Applicant was appointed as the Interim Resolution Professional (IRP) of the Corporate Debtor. Subsequently, the Committee of Creditors (CoC) decided in its meetings to continue with the IRP and later resolved for the liquidation of the Corporate Debtor due to the absence of assets, plant & machinery, inventories, ongoing projects, or business operations. The judgment emphasizes that the Adjudicating Authority does not have the jurisdiction to interfere in the commercial wisdom of the CoC, citing precedents such as K. Sasidhar's case and a judgment by the Hon'ble Supreme Court regarding the Essar Steel India Limited case. The commercial wisdom exercised by the CoC in deciding on liquidation is considered final, as it involves factors aimed at maximizing the asset value of the Corporate Debtor. The judgment reiterates that the discretion of payment to creditors lies with the CoC. Regarding the orders passed, the judgment declares the cessation of the moratorium under Section 14 of the IBC upon the liquidation order. The Liquidator is directed to issue a public announcement about the liquidation, send a certified copy of the order to the relevant authority, and handle legal proceedings on behalf of the Corporate Debtor with prior approval. The judgment specifies the powers and duties of the Liquidator, including the cessation of powers of the Board of Directors and other key personnel of the Corporate Debtor. The Liquidator is entitled to charge a fee for conducting the liquidation proceedings. In conclusion, the judgment allows the application for liquidation and appoints the IRP as the Liquidator for the purpose of liquidating the Corporate Debtor. The instant application is allowed and disposed of accordingly, with the specified observations and directions for compliance.
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