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2021 (3) TMI 994 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor Company - Section 33 and 34 of the Insolvency Bankruptcy Code - HELD THAT - This Adjudicating Authority is of the view that the liquidation order can be passed in respect of Corporate Debtor i.e. Varanasi Auto Sales Limited, as no resolution plan has been received by any of the Resolution applicant and the Members of the COC with 89.18% are also in favour for liquidation of the Company and further RP has complied with the provision laid down under Insolvency and Bankruptcy Code. The COC has also resolved the present RP to act as a liquidator in the matter and also the fee and expenses of the liquidation has been fixed in the COC meeting held on 17.01.2020. Liquidation order is passed - application allowed.
Issues: Liquidation order for Corporate Debtor Varanasi Auto Sales Limited under Insolvency and Bankruptcy Code.
Analysis: 1. Initiation of CIRP and Appointment of IRP: The CIRP for the Corporate Debtor Company was initiated based on a petition under Section 10 of the Code, appointing an Interim Resolution Professional (IRP) who was later replaced by another professional. The Tribunal affirmed the appointment of the new IRP. 2. Compliance with CIRP Progress and Expression of Interest: The Resolution Professional complied with the Insolvency and Bankruptcy Code requirements for the progress of the CIRP, including floating an Expression of Interest. However, no resolution plan was submitted within the specified timeline. 3. COA Resolutions and Liquidation Recommendation: The Committee of Creditors (COC) passed resolutions regarding the extension of CIRP if a plan was submitted and recommended liquidation in the absence of a plan, with a significant voting share in favor of liquidation. 4. Objections Raised by Prospective Resolution Applicant: A prospective Resolution Applicant raised objections regarding the rejection of their proposal, citing the lack of sharing the Information Memorandum and the voting share threshold for initiating liquidation. 5. Contentions by Liquidator: The Liquidator contended that previous applications challenging the CIRP process had been rejected by higher authorities, and with no resolution plan in place, the COC's decision for liquidation was justified. 6. Adjudicating Authority's Decision: After considering submissions and documents, the Adjudicating Authority determined that liquidation was appropriate due to the absence of a resolution plan, COC's approval for liquidation, and compliance with the Code by the Resolution Professional. 7. Appointment of Liquidator and Directions: The Adjudicating Authority appointed the Resolution Professional as the Liquidator, directing necessary notifications and public announcements for the liquidation process. The Liquidator was instructed to act in accordance with the Code and submit progress reports periodically. 8. Final Order: The Tribunal exercised its power under Section 33(1) to direct the Corporate Debtor to go into liquidation, appointing the Resolution Professional as the Liquidator and specifying the necessary procedures for the liquidation process. In conclusion, the Tribunal's judgment ordered the liquidation of Varanasi Auto Sales Limited due to the absence of a resolution plan, COC's approval, and compliance with the Insolvency and Bankruptcy Code, appointing the Resolution Professional as the Liquidator to oversee the liquidation process.
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