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2021 (6) TMI 200 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - no Resolution Plan approved by the CoC and the CoC by 96.70% voting share approved liquidation of the Corporate Debtor - HELD THAT - Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the Resolution Professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 96.70% voting share to liquidate the Corporate Debtor. In the present case, the RP wanted to continue as the liquidator. RP has given his consent which is annexed to the application at Annexure G. Section 34 of the Code does not envisage any role for the CoC in appointment of the Liquidator - This is a case where two Resolution Plans were received but neither of them approved by the CoC and the period of CIRP has expired on 13.02.2021. Application allowed.
Issues:
Liquidation of Corporate Debtor due to failure of approved Resolution Plans by CoC Analysis: 1. The Tribunal received an application from the Resolution Professional (RP) seeking liquidation of the Corporate Debtor as no Resolution Plan was approved by the Committee of Creditors (CoC), and the CoC approved liquidation by 96.70% voting share. 2. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a petition filed by a Financial Creditor under section 7 of the Insolvency and Bankruptcy Code, 2016. The RP was appointed, and public announcements were made as per the Code's requirements. 3. Despite receiving multiple Expression of Interests (EOIs) and Resolution Plans, none were approved by the CoC within the specified timeline. The RP extended the CIRP period, but as no Resolution Plan was accepted, liquidation became the only option. 4. The CoC, in subsequent meetings, proposed and approved the liquidation of the Corporate Debtor. The RP sought to continue as the Liquidator, and the Adjudicating Authority appointed him as such based on his consent, following the Code's provisions. 5. The Tribunal, after considering all submissions, ordered the liquidation of the Corporate Debtor in accordance with the Code's relevant sections. The RP was directed to hand over all documents to the appointed Liquidator, who would manage the liquidation process as per the Code and Regulations. 6. Various procedural and compliance steps were outlined in the order, including issuing public notices, cessation of powers of the Board of Directors, and cooperation from the Corporate Debtor's personnel. Legal proceedings were restricted, and the Liquidator was required to file necessary documents with the Registrar of Companies. 7. The Tribunal disposed of the application, set a date for a periodical report, and directed the Registry to inform all parties involved. Certified copies of the order would be issued upon completion of formalities.
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