2021 (4) TMI 638 - Tri - Insolvency and Bankruptcy

Extension of Liquidation Proceedings by one year in terms of Regulation 44(2) of the IBBI (Liquidation Process) regulations, 2016 - HELD THAT - The assets of the Company have not been liquidated yet as the land on which the Hotel building is situated does not belong to the Company and the main entrance area of the Hotel belongs to a third party. It is further submitted that more time will be required to appoint an amin for the demarcation of the assets of the Company and that of the other parties, as was suggested by the sole secured creditor in the 2nd Stakeholders Consultative Committee Meeting - That additional time is also required to file as application Regulation 38(1) of the Liquidation Process Regulations. Liquidation is required to be completed within 1 year. Liquidation order was passed on 06/09/2019. It should have been completed on 05/09/2020 - Considering the submissions made today, Liquidation period is extended by another 6 months only. This 6 months extension is excluding 160 days exclusion from 25/03/2020 till 31/08/2020 allowed earlier for lockdown/ shutdown/ Covid Pandemic. Application allowed.

Issues:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Appointment of Interim Resolution Professional (IRP) and Resolution Professional (RP).
3. Rejection of Resolution Plan and recommendation for liquidation.
4. Appointment of Liquidator and assets of the Company.
5. Impact of Covid-19 pandemic on liquidation process.
6. Challenges in selling Company's assets and application for extension of liquidation period.

Analysis:
1. The Financial Creditor filed CP (IB) No. 05/GB/2018 for initiating CIRP against Bluefern Ventures Pvt. Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming dues of ?37,68,62,983.00. The Tribunal initiated CIRP and appointed Hrisikesh Dasgupta as IRP, later confirmed as RP.

2. The Resolution Plan submitted by the promoter was rejected, leading to the recommendation of liquidation by the Committee of Creditors (CoC). The Tribunal ordered liquidation of the Company and appointed the Applicant as the Liquidator.

3. The Liquidator faced challenges in selling the Company's assets due to issues with ownership of the land and the main entrance area of the Hotel building. The Liquidator sought an extension of the liquidation period under Regulation 44 of the IBBI (Liquidation Process) Regulations, 2016.

4. The Covid-19 pandemic and subsequent lockdowns impacted the liquidation process, delaying proceedings. The Liquidator informed the Tribunal about the difficulties in selling the assets effectively due to ownership disputes and suggested applying for Regulation 38(1) of the Liquidation Process Regulations.

5. The Tribunal heard the submissions and extended the liquidation period by another 6 months, excluding the days during the lockdown period. The Liquidator was directed to complete the process within this extended period without increasing costs, and the Financial Creditor was instructed to provide necessary funds for the completion of the liquidation.

6. The Tribunal allowed the application for extension of the liquidation period and provided specific instructions to ensure the timely completion of the liquidation process, emphasizing the importance of maximizing the value of the Company during liquidation.

This detailed analysis covers the key issues addressed in the judgment, including the initiation of CIRP, appointment of IRP and RP, rejection of Resolution Plan, challenges in liquidation, impact of Covid-19, and the extension of the liquidation period.

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