2021 (6) TMI 567 - Tri - Insolvency and Bankruptcy

Liquidation order - Section 33(2) of the Insolvency Bankruptcy Code, 2016 - HELD THAT - The RP prepared the Information Memorandum and apprised the CoC in its 4th meeting dated 29.04.2020 that the Copy of Information Memorandum may be obtained after submitting the confidential undertaking and Form G for inviting the expression of interest was published on 17.08.2020 after the approval of the CoC in same meeting. The Form-G was again issued on 14.09.2020 after the discussion held in the fifth CoC meeting held on 07.09.2020. This authority also extended the CIR Period for further 90 days and excluded the period from 25.03.2020 to 31.07.2020 due to Covid-19. In furtherance to the publication of Form G, the resolution professional received an expression of interest from 4 prospective resolution applicants. The liquidation of the company is ordered.

Summary

Issues: Liquidation order sought by RP based on CoC resolution - Feasibility of resolution plans - Appointment of Liquidator - Directions for liquidation process.

Analysis:
1. Liquidation Order: The IA filed under section 33(2) of the Insolvency & Bankruptcy Code, 2016, sought a liquidation order based on the resolution passed by the Committee of Creditors (CoC) in its 6th meeting. The application detailed the history of the case, starting from its admission on 08.11.2019, appointment of the IRP, constitution of the CoC, and subsequent actions taken by the RP, leading to the decision for liquidation.

2. Feasibility of Resolution Plans: The RP prepared the Information Memorandum and invited expressions of interest from prospective resolution applicants. Despite receiving interest from 4 applicants and two proposed resolution plans, the CoC, in its 6th meeting, deemed the plans not feasible and viable. Consequently, the CoC passed a resolution for the initiation of the liquidation process of the Corporate Debtor.

3. Appointment of Liquidator: The Tribunal, after considering the application and averments, deemed it a fit case for liquidation. Accordingly, Mr. Aishwarya Mohan Gahrana was appointed as the Liquidator in accordance with Section 32 of the Code. The Registry was directed to communicate this appointment to relevant authorities, and the Order of Moratorium was to cease with a fresh Moratorium under Section 33(5) commencing.

4. Directions for Liquidation Process: The Tribunal issued detailed directions for the liquidation process, including the discharge of officers, employees, and workmen of the corporate debtor, investigation of financial affairs, disposal of pending applications, recovery of dues, submission of reports, and communication of the order to relevant parties. The IA filed in the case was disposed of in accordance with the terms outlined in the order.

By meticulously analyzing the application, the Tribunal concluded that the case warranted liquidation, leading to the appointment of a Liquidator and the initiation of the liquidation process as per the provisions of the Insolvency & Bankruptcy Code, 2016. The decision was based on the CoC's assessment of the feasibility of the proposed resolution plans, ultimately culminating in the order for liquidation and the subsequent steps to be taken in the process.