9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 718 - Tri - IBCLiquidation of Corporate Debtor - section 33 of the IB Code, 2016 - HELD THAT - Recently the Hon'ble Supreme Court of India in its judgment passed in Civil Appeal No. 8766-67 of 2019-Committee of Creditors of Essar Steel India Limited through Authorised Signatory vs. Satish Kumar Gupta Ors. 2019 (11) TMI 731 - SUPREME COURT observed that the commercial wisdom has been exercised by the CoC after taking into count all the factors leading to maximisation of asset value of the Corporate Debtor, but the ultimate discretion of what to pay and how to pay each class or sub-class of creditors lies with the CoC. The moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation - liquidation order is passed.
Issues involved:
Liquidation of Corporate Debtor under Section 33 of the IB Code, 2016. Issue 1: Admission and Replacement of RP The Corporate Insolvency Resolution Process (CIRP) was initiated under section 33 of the IB Code, 2016. Initially, an Interim Resolution Professional (IRP) was appointed upon admission of the application, followed by the appointment of a Resolution Professional (RP) to replace the IRP. Issue 2: COC Decision and Liquidation The Committee of Creditors (COC) rejected the Resolution Plan proposed by the RP in its 13th meeting and decided to liquidate the Corporate Debtor as a going concern. The COC authorized the RP to file an application under Section 33 of the IB Code for liquidation. Issue 3: Legal Precedent and Commercial Wisdom The judgment referred to a decision by the Hon'ble Supreme Court of India regarding the commercial wisdom of the COC. The Supreme Court emphasized that the Adjudicating Authority cannot interfere with the commercial decisions made by the COC, as the ultimate discretion on payment matters lies with the COC. Issue 4: Orders for Liquidation Based on the circumstances and COC decision, the Adjudicating Authority issued several orders for the liquidation process. These orders included ceasing the moratorium, issuing public announcements, transferring powers to the Liquidator, and directing the Liquidator to manage the affairs of the Corporate Debtor. Issue 5: Appointment of Liquidator and Discharge of RP The Adjudicating Authority appointed a Liquidator for the liquidation process since the COC did not propose a name. The Liquidator was appointed with specific registration details. Additionally, the IRP/RP was discharged from their duties, and the COC was directed to clear their dues as per legal requirements. Issue 6: Disposal of Application The instant application filed by the RP was allowed, leading to the Adjudicating Authority passing an order for the liquidation of the Corporate Debtor under Section 33 of the IB Code, 2016. The Liquidator was appointed, and the IA was disposed of with the mentioned observations. By analyzing each issue comprehensively, the judgment detailed the process of liquidation, the authority's orders, the legal precedent guiding the decision-making process, and the specific actions taken regarding the RP, COC, and Liquidator.
|
