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2021 (8) TMI 1109 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Despite all possible steps as required under the Code taken during the CIRP, the CoC did not receive any viable resolution plan/proposal for revival of the Company. The CoC in its wisdom has resolved in favour of the liquidation of the Company. This Authority has no reason before it to take a contrary view in terms of Section 33(1) (a) of the Code. Therefore, there are no option than to pass an order for liquidation of the Company in the manner laid down in Chapter-Ill of the Code. Application allowed.
Issues: Application for liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 for M/s. Kanakadhara Ventures Private Limited.
In this judgment by the National Company Law Tribunal, Hyderabad Bench, the application was filed under Section 33 of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the Corporate Debtor, M/s. Kanakadhara Ventures Private Limited. The process began with the admission of the application by the Tribunal on a specified date, appointing an Interim Resolution Professional. The Committee of Creditors (CoC) was constituted as per the provisions of the Code, and subsequent meetings of the CoC were held to discuss the appointment of the Resolution Professional and the submission of Expression of Interest (EOI) by Prospective Resolution Applicants (PRAs). Despite extensions granted for the submission of Resolution Plans, issues arose regarding the terms set by the Resolution Applicant, leading to a decision for a fresh issue of EOI. The CoC deliberated on the improvement of Resolution Plan amounts, with PRAs seeking the release of collateral properties and personal guarantees, which conflicted with CIRP regulations and Banking regulations. Following concerns about high-value transactions not in the normal course of business, a Forensic Audit was initiated, revealing transactions falling under Section 66 of the Code. An application under Section 66(1) was subsequently filed before the Tribunal based on the Forensic Report. The CoC ultimately voted against the submitted resolutions, indicating the rejection of the Resolution Plan, leading to discussions on liquidation in subsequent meetings. The Resolution Professional expressed consent to act as the Liquidator, but later withdrew this consent upon the appointment of another individual as the liquidator by the Joint lenders forum. The Tribunal, citing a legal precedent, emphasized that it is obligated to initiate the liquidation process under Section 33(1) of the Code without delving into the commercial decisions of the CoC. Despite efforts made during the Corporate Insolvency Resolution Process (CIRP), the absence of a viable resolution plan led the CoC to resolve in favor of liquidation, a decision upheld by the Tribunal. Consequently, the Tribunal ordered the liquidation of the Corporate Debtor in accordance with Chapter-III of the Code, appointing a specific individual as the Liquidator and outlining various directions and procedures to be followed during the liquidation process.
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