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2021 (1) TMI 106 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - section 33 34 of the Insolvency and Bankruptcy Code, 2016 - Seeking appointment of the Liquidator - HELD THAT - It is found that no viable Resolution Plan was received and the Corporate Debtor does not possess significant assets. Also, the bank balance available in the Bank account of the Corporate Debtor was insignificant/inadequate to pay the fees/ remuneration of professionals. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Fourth meeting dated 19.03.2020. 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 COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT . The application so filed by the RP under Section 33 34 of the IB Code, 2016 is allowed and the Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Aditya Exim Limited. The RP i.e. Shri Gordhanbhai Ratnabhai Godhani, shall act as the Liquidator for the purpose of liquidation of the Corporate Debtor - moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation.
Issues:
Liquidation of Corporate Debtor under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016. Analysis: The Applicant, acting as the Resolution Professional (RP), filed an application for the liquidation of the Corporate Debtor under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016, and for the appointment of a Liquidator. The Corporate Debtor, initially facing a Corporate Insolvency Resolution Process (CIRP) under Section 9 of the IB Code, had no viable Resolution Plan and lacked significant assets, leading the Committee of Creditors (CoC) to decide on liquidation during their Fourth Meeting. The CoC's commercial wisdom in opting for liquidation was upheld, emphasizing that the Adjudicating Authority cannot interfere in such decisions as per legal precedents. The Tribunal, after considering the lack of viable Resolution Plans, the absence of significant assets, and the CoC's decision for liquidation, issued various orders. The moratorium under Section 14 of the IB Code was lifted upon the liquidation order, and the Liquidator was instructed to make a public announcement regarding the liquidation. Additionally, the Liquidator was mandated to notify the relevant authority about the liquidation, and legal proceedings against the Corporate Debtor were restricted, except those initiated by the Liquidator with prior approval. The Tribunal clarified that certain legal proceedings exempted by the Central Government would not be affected. Furthermore, the Tribunal outlined the transfer of powers from the Board of Directors to the Company Liquidator, detailing the duties and powers the Liquidator would assume as per the IB Code and related regulations. Employees were directed to cooperate with the Liquidator, and the Liquidator was authorized to charge fees proportional to the value of the liquidation estate assets. The Registry was tasked with communicating the order to the relevant entities promptly. Conclusively, the Tribunal allowed the application for liquidation of the Corporate Debtor, appointing the RP as the Liquidator for the process. The application was granted, and the matter was resolved accordingly.
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