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2021 (5) TMI 104 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - no Resolution Plan received and the CoC by 100% voting share approved liquidation of the Corporate Debtor - HELD THAT - This is a case where no Resolution Plan was received and the period of CIRP has expired on 14.06.2020. Therefore, there is no alternative but to order the liquidation of the Corporate Debtor. The liquidation of Corporate Debtor is permitted - application allowed.
Issues Involved:
Liquidation of Corporate Debtor due to absence of Resolution Plan and expired CIRP period. Detailed Analysis: 1. Background and Application: The Resolution Professional filed an application seeking liquidation of the Corporate Debtor as no Resolution Plan was received, and the Committee of Creditors (CoC) approved liquidation by 100% voting share. 2. Initiation of CIRP: The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor following a petition by a Financial Creditor under section 7 of the Insolvency and Bankruptcy Code, 2016. The Interim Resolution Professional was appointed during this process. 3. Procedural Compliance: Various steps were taken during the CIRP, including the constitution of the Committee of Creditors, public announcements, and holding CoC meetings to discuss matters like remuneration, appointment of valuers, and initiating applications under the Code. 4. Non-Cooperation and CIRP Period: Despite efforts to communicate with the suspended management, no cooperation was received. The CIRP period expired, and no extension or exclusion application was filed, leading to the decision for liquidation to maximize value and avoid future costs. 5. CoC Meetings and Decision: Subsequent CoC meetings discussed the necessity of starting the liquidation process due to the RP's unwillingness to act as a liquidator. The CoC passed a resolution with 100% voting share for liquidation. 6. Order for Liquidation: Considering the absence of a Resolution Plan and the expired CIRP period, the Tribunal ordered the liquidation of the Corporate Debtor in accordance with the Code's provisions. 7. Appointment of Liquidator: As the RP declined to act as the Liquidator, a new Liquidator was appointed subject to regulatory requirements. The RP was directed to hand over all relevant documents to the Liquidator. 8. Liquidation Process: The Liquidator was tasked with initiating the liquidation process as per the Code and relevant regulations, with public notices to be issued regarding the Corporate Debtor's liquidation. 9. Legal Proceedings and Discharge: All powers of the Board of Directors and key managerial persons ceased to exist, transferring to the Liquidator. Legal proceedings against the Corporate Debtor were restricted, allowing the Liquidator to act on behalf of the Corporate Debtor with prior approval. 10. Regulatory Compliance: The Liquidator was directed to file a copy of the liquidation order with the Registrar of Companies and ensure compliance with reporting requirements. 11. Conclusion: The application for liquidation was disposed of as per the Tribunal's directions, with further instructions for periodic reporting and dissemination of the order to all concerned parties. This detailed analysis outlines the key aspects of the Tribunal's judgment regarding the liquidation of the Corporate Debtor due to the absence of a Resolution Plan and the expiration of the CIRP period.
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