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2021 (5) TMI 431 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since there were no Prospective Investors, in the 6th CoC meeting held on 22.01.2020, the CoC unanimously passed a resolution to seek an order for liquidation of the Corporate Debtor - Thereafter, in the 7th CoC meeting held on 17.03.2020, it was also discussed that it is the essence that the Corporate Debtor cannot be sold as a going concern, since there is no activity in the company. It is ordered that the Corporate Debtor herein shall be liquidated - Application allowed.
Issues:
1. Liquidation order sought by Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. 2. Cooperation issues with erstwhile Board of Director. 3. Failure to obtain a Resolution Plan. 4. Pending application against leased property transaction. 5. Appointment of Liquidator and directions for liquidation process. Analysis: 1. The Resolution Professional filed IA/213/IB/2020 seeking liquidation of the Corporate Debtor as per Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) had been initiated earlier, but no Resolution Plan was obtained despite extensions granted by the Adjudicating Authority. 2. Cooperation issues arose with the erstwhile Board of Director, Mr. Arumugasamy, who initially expressed willingness to cooperate but later failed to do so, leading to delays and hindrances in the CIRP. Despite orders from NCLAT and the Adjudicating Authority, Mr. Arumugasamy continued to be non-cooperative, impacting the resolution process negatively. 3. The process of inviting Expression of Interest and submission of Resolution Plans did not yield any results due to the lack of Prospective Investors. Consequently, in the absence of viable Resolution Plans, the Committee of Creditors (CoC) decided unanimously to proceed with liquidation in the 6th CoC meeting. 4. An application under various sections of the Code was pending against a leased property transaction involving the erstwhile Board of Director and his son. The Resolution Professional highlighted the financial dues pending from this transaction, emphasizing the need for adjudication by the Adjudicating Authority. 5. The Adjudicating Authority ordered the liquidation of the Corporate Debtor appointing a Liquidator, Mr. Ashok Kumar Seshadri, to oversee the process. The Liquidator was directed to adhere strictly to the provisions of the IBC, 2016, investigate financial affairs, issue public announcements, and handle matters related to officers/employees, among other responsibilities outlined in the order. The Liquidator was also instructed to submit reports within specified timelines and communicate with relevant authorities as per the regulations. Additional Note: The applications filed by the erstwhile Board of Director seeking relief and attempting to delay the liquidation process were dismissed by the Adjudicating Authority as lacking merit. The Authority closed these applications in view of the liquidation order passed in IA/213/IB/2020, emphasizing the need to proceed with the liquidation process efficiently.
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