2021 (8) TMI 689 - Tri - Insolvency and Bankruptcy

Liquidation of corporate debtors - Section 33(2) of IBC, 2016 - HELD THAT - Since the CoC in its 6th and 7th meeting after discussing and deliberating about the current affairs of the Corporate Debtor by taking into consideration that there were no Eols received from any prospective Resolution Applicant and also keeping in view of the fact that the Corporate Debtor is not running its business and based on its commercial wisdom has decided to liquidate the Corporate Debtor. Thus, by taking into consideration the provisions of Section 33 of IBC, 2016 and in the absence of any opposition to the Application from the Promoters of the Corporate Debtor, this Tribunal orders for the liquidation of the Corporate Debtor. It is also seen from the records that the Applicant herein has accorded his written consent in Form AA to act as the Liquidator of the Corporate Debtor. The Applicant has also filed Authorization for Assignment (AFA) in Form - B issued by the Indian Institute of Insolvency Professionals of ICAI. The liquidation of Corporate Debtor is approved - application allowed.

Summary

Issues:
1. Application for liquidation under Section 33(2) of the Insolvency and Bankruptcy Code 2016.
2. Appointment of Interim Resolution Professional (IRP) in Corporate Insolvency Resolution Process (CIRP).
3. Constitution of Committee of Creditors (CoC) and voting shares.
4. Lack of cooperation from erstwhile promoters.
5. Resolution for liquidation by CoC.
6. Appointment of Liquidator and related expenses.
7. Decision for liquidation based on commercial wisdom and legal provisions.
8. Appointment of Mr. Vasudevan Navneeth as Liquidator with specified terms and directions.

Analysis:
1. The application sought liquidation of the Corporate Debtor under Section 33(2) of the IBC, 2016, requesting appropriate orders for the same.
2. The Tribunal had earlier initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appointed the Applicant as the Interim Resolution Professional (IRP).
3. The CoC was constituted with the Financial Creditor triggering CIRP initially having 100% voting share, later reconstituted with Indian Bank and Dr. Palaniappan holding voting shares.
4. The Resolution Professional faced non-cooperation from the erstwhile promoters, leading to the Tribunal directing them to provide necessary information.
5. The CoC unanimously resolved in its 6th meeting to liquidate the Corporate Debtor, authorizing the Resolution Professional and Legal Counsel for necessary actions and cost-sharing by Financial Creditors.
6. Following the 7th CoC meeting, the Tribunal approved the appointment of Mr. Vasudevan Navneeth as the Liquidator, specifying fees and expenses to be borne.
7. The decision for liquidation was based on the CoC's assessment of the Corporate Debtor's status, absence of Resolution Applicants, and compliance with legal provisions, leading to the Tribunal's order for liquidation.
8. Mr. Vasudevan Navneeth was appointed as the Liquidator with specific terms and directions to follow IBC provisions, investigate financial affairs, communicate with relevant authorities, and proceed with the liquidation process as per regulations.

This detailed analysis covers the key issues addressed in the judgment, outlining the progression from CIRP initiation to the appointment of a Liquidator and the decision for liquidation based on commercial considerations and legal requirements.