2021 (5) TMI 109 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(2) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Applicant submitted that the Applicant/RP is not willing to continue as Liquidator. In this circumstance, this Adjudicating Authority as per Section 34(5) of the IBC, 2016 hereby directs the Insolvency and Bankruptcy Board of India (IBBI) to propose the name of another Insolvency Professional to be appointed as a Liquidator and IBBI as per Section 34(6) of the IBC, 2016, shall propose the name of another Insolvency Professional along with written consent from the Insolvency Professional in the specified form within 10 days from the date of receipt of this order. Post for further orders on 26.04.2021.

Summary

Issues: Liquidation of Corporate Debtor

1. Initiation of CIRP and Appointment of Interim Resolution Professional (IRP):
The application was filed under Section 33(2) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 by the Applicant seeking an order for the liquidation of the Corporate Debtor. The main application for Corporate Insolvency Resolution Process (CIRP) was filed by a Practising Company Secretary, which led to the appointment of the Applicant as the Interim Resolution Professional by the Adjudicating Authority.

2. Conduct of CIRP Process:
The Applicant issued advertisements calling for claims against the Corporate Debtor and conducted meetings with the suspended directors, revealing that the Corporate Debtor had no fixed assets at the commencement of CIRP. The 1st Committee of Creditors (CoC) meeting faced non-cooperation from the Operational Creditor and the suspended directors, leading to adjournments.

3. Decision for Liquidation:
The CoC, reconstituted with a sole Financial Creditor, decided to initiate liquidation proceedings against the Corporate Debtor due to nil cash flow and the absence of assets for realization. The CoC representative confirmed 100% voting for liquidation and requested necessary actions to be taken.

4. Appointment of Liquidator:
The Applicant expressed unwillingness to act as a liquidator, leading the Adjudicating Authority to direct the Insolvency and Bankruptcy Board of India (IBBI) to propose the name of another Insolvency Professional as a Liquidator. IBBI was given 10 days to propose a name with written consent from the professional.

5. Future Proceedings:
The Adjudicating Authority ordered the appointment of the proposed Insolvency Professional as the Liquidator and scheduled further orders on the matter for 26.04.2021.

This detailed analysis covers the key issues of the judgment, including the initiation of CIRP, conduct of the CIRP process, decision for liquidation, appointment of a liquidator, and the subsequent proceedings.