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2021 (5) TMI 948 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - section 33(1)(a) of the Insolvency Bankruptcy Code, 2016 - HELD THAT - No resolution plan has been called during the 180 days and extension for the for time limit of this CIRP as per section 12(2) was put before CoC for voting in the last CoC meeting. The voting as received on 12.03.2020, 66% positive vote has not been received from CoC members as mandate for it. Hence, applicant filed this application for initiation of liquidation order u/s. 33 of IBC, 2016 read with regulation 3 of the IBBI (Liquidation Process) Regulations, 2016. This is a fit case for liquidation - Liquidation order granted - application allowed.
Issues:
1. Liquidation order sought by RP under Insolvency & Bankruptcy Code, 2016. 2. Failure to receive a resolution plan during the Corporate Insolvency Resolution Process (CIRP). 3. Non-cooperation by the suspended director hindering valuation process. 4. Lack of positive vote from CoC members for time extension in CIRP. 5. Appointment of Liquidator and directions for liquidation process. Issue 1: Liquidation order sought by RP under Insolvency & Bankruptcy Code, 2016 The RP filed an application seeking a liquidation order under Section 33 of the Insolvency & Bankruptcy Code, 2016, as the 180-day period for the Corporate Insolvency Resolution Process (CIRP) had expired without receiving any resolution plan. The Tribunal found the application fit for liquidation and ordered the same. Issue 2: Failure to receive a resolution plan during the Corporate Insolvency Resolution Process (CIRP) The application highlighted that no resolution plan was received within the stipulated 180 days of the CIRP. Despite efforts to constitute a Committee of Creditors (CoC) and appoint registered valuers, the lack of cooperation from the suspended director of the Corporate Debtor impeded the valuation process, leading to the decision to move for liquidation. Issue 3: Non-cooperation by the suspended director hindering valuation process The suspended director's non-cooperation, specifically in not providing information about the company's trucks, obstructed the valuation process. This lack of cooperation was a significant factor in the RP's decision to seek liquidation as the necessary valuation could not be completed. Issue 4: Lack of positive vote from CoC members for time extension in CIRP The application mentioned that a vote was taken for extending the time limit of the CIRP as per Section 12(2) of the Code, but the required 66% positive vote from CoC members was not obtained. This failure to secure the necessary mandate further supported the RP's application for liquidation. Issue 5: Appointment of Liquidator and directions for liquidation process The Tribunal appointed a specific Liquidator and issued detailed directions for the liquidation process, including communicating the order to relevant authorities, ceasing the previous moratorium, initiating a fresh moratorium, discharging officers and employees of the Corporate Debtor, investigating financial affairs, disposing of pending applications, submitting reports, and informing stakeholders. The Liquidator was instructed to proceed with the liquidation process in accordance with the Code's provisions and relevant regulations. Overall, the Tribunal allowed the RP's application for liquidation of the Corporate Debtor based on the circumstances presented, emphasizing the need for a structured liquidation process as per the Insolvency & Bankruptcy Code, 2016.
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