2021 (5) TMI 427 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - no Resolution Plan received by Resolution Professional in spite of publication of Form G twice - HELD THAT - This is a case where no Resolution Plan has been received in spite of publication of Form G twice and there is no Resolution Plan for consideration of the CoC. The extended period of CIRP has expired on 25/02/2021. Therefore, there is no alternative but to order the liquidation of the Corporate Debtor. The application is allowed and the Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof.

Summary

Issues:
Liquidation of Corporate Debtor due to non-receipt of Resolution Plan despite publication of Form G twice.

Analysis:
The case involves an application filed by the Resolution Professional seeking liquidation of the Corporate Debtor as no Resolution Plan was received despite the publication of Form G twice. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and various meetings of the Committee of Creditors (CoC) were conducted. The CoC unanimously decided to liquidate the Corporate Debtor as no viable Resolution Plan was forthcoming.

The Resolution Professional was appointed as the Liquidator, subject to possessing a valid Authorisation for Assignment (AFA). The Liquidator is tasked with initiating the liquidation process as per the provisions of the Insolvency and Bankruptcy Code and related regulations. Public Notice of the liquidation is to be issued in specified newspapers, and all powers of the Board of Directors and key managerial persons are transferred to the Liquidator.

Additionally, the personnel of the Corporate Debtor are directed to cooperate with the Liquidator during the liquidation process. Legal proceedings against the Corporate Debtor are restricted once the liquidation process commences, except with the prior approval of the Adjudicating Authority. The liquidation order serves as a notice of discharge to the officers, employees, and workmen of the Corporate Debtor, except for ongoing business operations managed by the Liquidator.

The Liquidator is required to file a copy of the liquidation order with the Registrar of Companies, and the Registry is directed to forward a copy to the appropriate authorities. The application for liquidation is disposed of as per the directions provided in the judgment, and further proceedings are scheduled for monitoring purposes. The parties involved are instructed to be informed promptly, and a certified copy of the order will be issued upon formal application.