9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 633 - AT - Insolvency and BankruptcySeeking Liquidation of Corporate Debtor - no Resolution Plan has been approved by the Committee of Creditors (CoC) before the maximum period permitted for the Corporate Insolvency Resolution Process (CIRP) under Section 12 of IBC - HELD THAT - The Appellate Tribunal has to perforce consider the relief sought by the Appellant-Resolution Professional approved by the CoC for setting aside the impugned order and initiation of Liquidation Process. The Adjudicating Authority has failed to implement the order of the Appellate Tribunal dated 18.11.2019. It is settled law that whatever power vests in the Adjudicating Authority is always available to Appellate Authority. It is in the fitness of situation to allow the appeal and set aside the impugned order - Corporate Debtor- M/s.K.S.Oils Ltd shall liquidate in the manner as laid down in Chapter-III of the Code - moratorium shall cease to have effect - Application allowed.
Issues Involved:
1. Dismissal of the Interlocutory Application (IA) for liquidation as not maintainable and infructuous. 2. Delay in the Corporate Insolvency Resolution Process (CIRP) beyond the statutory period. 3. Repeated rejection of Resolution Plans by the Committee of Creditors (CoC). 4. Intervention application by Om Shri Shubh Labh Agritech Private Limited. 5. Adherence to the timelines and objectives of the Insolvency and Bankruptcy Code (IBC). Detailed Analysis: 1. Dismissal of the Interlocutory Application (IA) for liquidation as not maintainable and infructuous: The Appellant, Mr. Kuldeep Verma, Resolution Professional (RP) of M/s. K.S Oils Ltd., challenged the dismissal of IA No. 165/2018 by the Adjudicating Authority (NCLT, Indore Bench at Ahmedabad Court No.1) on 01.01.2021. The IA sought liquidation of the Corporate Debtor as no Resolution Plan was approved by the CoC within the maximum period permitted under Section 12 of the Insolvency and Bankruptcy Code (IBC), 2016. The Adjudicating Authority dismissed the IA as not maintainable and infructuous despite the lapse of 981 days from the date of filing. 2. Delay in the Corporate Insolvency Resolution Process (CIRP) beyond the statutory period: The Appellant argued that Section 12 of the Code mandates completion of CIRP within 180 days, extendable to 270 days. Despite this, the CIRP extended beyond 270 days without an approved Resolution Plan. The RP filed IA No. 165/2018 seeking liquidation, but the Adjudicating Authority repeatedly directed the RP to consider various addendums to the Resolution Plan submitted by SREI Infrastructure Finance Limited, which were ultimately rejected by the CoC. 3. Repeated rejection of Resolution Plans by the Committee of Creditors (CoC): SREI, a Financial Creditor, submitted multiple addendums to its Resolution Plan, all of which were rejected by the CoC. The CoC's commercial wisdom in rejecting these plans was upheld, and the RP filed affidavits apprising the Adjudicating Authority of these rejections. Despite this, the Adjudicating Authority did not initiate liquidation, leading to further delays. 4. Intervention application by Om Shri Shubh Labh Agritech Private Limited: Om Shri Shubh Labh Agritech Private Limited filed an intervention application seeking to infuse ?310 Crore (later increased to ?625 Crore) into the Corporate Debtor. The Appellate Tribunal rejected this application, stating that it would violate the principles of natural justice and the prescribed process for selecting a Resolution Applicant. The Tribunal emphasized that such midway interruptions are neither warranted by the Regulations nor by the Code. 5. Adherence to the timelines and objectives of the Insolvency and Bankruptcy Code (IBC): The Appellate Tribunal highlighted that the objective of the IBC is to ensure a time-bound resolution of insolvency cases. The Adjudicating Authority's prolonged consideration of various addendums and failure to initiate liquidation defeated the purpose of the Code. The Tribunal noted that the year 2020 faced unprecedented challenges due to the global pandemic, but this should not have justified repeated references to the CoC for consideration of rejected plans. Conclusion: The Appellate Tribunal set aside the impugned order dated 01.01.2021 and initiated the liquidation of the Corporate Debtor M/s. K.S.Oils Ltd. under Section 33(1) of the Code. The Tribunal appointed Mr. Kuldeep Verma as the Liquidator and directed him to issue a public announcement stating that the Corporate Debtor is in liquidation. The Tribunal emphasized the need for adherence to the timelines and objectives of the IBC to ensure a time-bound resolution of insolvency cases.
|
