2021 (3) TMI 922 - Tri - Insolvency and Bankruptcy

Liquidation Order of Corporate Debtor - requirement of contribution towards liquidation expenses - Section 33 of the Insolvency Bankruptcy Code, 2016 - HELD THAT - The CoC and the Resolution Professional have formed a view that there will be no situation of contribution towards CIRP /liquidation cost, as there exist sufficient assets to meet such costs. Hence, necessary resolution as per Regulation 2A of Insolvency and Bankruptcy Board of India (Liquidation Process) has not been passed. As a special instance the requirement of passing of such resolution, before filing an application for liquidation, is waived - Corporate Debtor needs to be liquidated. Application allowed.

Summary

Issues:
Liquidation process initiation under Section 33 of the Insolvency & Bankruptcy Code, 2016 for Sonali Energees Private Limited - the Corporate Debtor.

Analysis:
The Tribunal received an Interlocutory Application from the Resolution Professional seeking an Order of liquidation for the Corporate Debtor. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process earlier, and the Resolution Professional had invited claims from creditors. Despite efforts to solicit resolution plans, none were received, leading the Committee of Creditors (CoC) to decide on liquidation. The CoC also resolved to appoint the Resolution Professional as the Liquidator. The Tribunal noted that there were sufficient assets to cover the costs, thus waiving the need for a specific resolution on contribution towards CIRP/liquidation costs.

The Tribunal acknowledged the absence of received resolution plans or expressions of interest, along with the prolonged suspension of the Corporate Debtor's operations, leading to the decision for liquidation. While recognizing the need for a resolution in specific terms, the Tribunal, considering the circumstances, waived the requirement in this instance. Consequently, the Tribunal ordered the liquidation of the Corporate Debtor.

The Tribunal's order included appointing the Resolution Professional as the Liquidator, ceasing the moratorium, transferring powers to the Liquidator, determining fees for the liquidation proceedings, and restricting legal proceedings against the Corporate Debtor. The Liquidator was tasked with recovering trade receivables and other credits, with the order serving as a notice of discharge to the Corporate Debtor's officers, employees, and workmen. The Tribunal directed the Registry to publish the order and send copies to relevant parties. The Interlocutory Application was allowed, and the Liquidator was instructed to file reports as per regulations.

In conclusion, the Tribunal approved the liquidation of Sonali Energees Private Limited, appointing the Resolution Professional as the Liquidator and outlining various directives regarding the liquidation process, legal proceedings, and communication of the order to concerned parties.