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2021 (10) TMI 767 - Tri - Insolvency and BankruptcyLiquidation of the corporate debtor - Section 33(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT - The bench vide order dated 26.04.2021 observed that IRP/RP has a duty to complete the process of CIRP within 330 days for which no directions or orders are required. Hence, the application was dismissed with the cost of ₹ 5,000/- to RP for filing such frivolous application. The only option left with CoC to resolve for liquidation of corporate debtor. It was submitted while hearing of this application, by RP that due to second wave of Covid-19 pandemic lockdown from April 2021 to June 2021, the CoC could not meet to decide liquidation and only after unlock in June 2021, the lenders in their meeting held on 16.06.2021 decided and passed resolution and approached Adjudicating Authority for order of liquidation. Because no resolution plan was forthcoming, as per the provisions of IBC, 2016 it is to seek the liquidation as provided under the provisions of section 33 of IBC, 2016 of which the relevant sub-section 1 of section 33. Taking into consideration the provisions of law as well as the facts on record, the liquidation of the corporate debtor is ordered and in the circumstances the corporate debtor stands liquidated and the incidence of liquidation to follow, on and from the date of this order in terms of the provisions of IBC, 2016 and more particularly as given in Chapter - III of IBC, 2016 and also in terms of Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017. Application allowed.
Issues:
1. Application for liquidation of the corporate debtor under Section 33(1) of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with regulations during the Corporate Insolvency Resolution Process (CIRP). 3. Extension of CIRP timelines due to the COVID-19 pandemic. 4. Rejection of the resolution plan and initiation of the liquidation process. 5. Passing of resolution for liquidation by the Committee of Creditors (CoC). 6. Appointment of a liquidator and subsequent directions for the liquidation process. Issue 1: Application for Liquidation: The Resolution Professional (RP) filed an application under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the corporate debtor, VGA Developers Private Limited. Issue 2: Compliance with Regulations: The RP conducted the Corporate Insolvency Resolution Process (CIRP) in compliance with Section 15 of the Code and Regulation 6 of the IBBI Regulations. Public announcements were made as required by the regulations. Issue 3: Extension of CIRP Timelines: Due to the COVID-19 pandemic, an exclusion period was granted by the tribunal, extending the CIRP timelines. The CIRP expiration dates were adjusted accordingly, and extensions were granted to accommodate the delays caused by the pandemic. Issue 4: Rejection of Resolution Plan and Liquidation Process: Despite efforts to find a resolution applicant, the plan submitted was rejected by the CoC. With no viable resolution plan in place, the RP sought liquidation as per Section 33 of the IBC, 2016. Issue 5: Resolution for Liquidation by CoC: In the 8th meeting of the CoC, a resolution was passed with a significant voting share, initiating the liquidation process of the corporate debtor as per Section 33(2) of the IBC, 2016 and relevant regulations. Issue 6: Appointment of Liquidator and Directions: Following the decision for liquidation, a liquidator was appointed, and various directions were issued for the commencement and conduct of the liquidation process. These directions included public announcements, communication to relevant authorities, cessation of moratorium, and submission of reports within specified timelines. In conclusion, the tribunal ordered the liquidation of the corporate debtor, VGA Developers Private Limited, based on the resolution passed by the CoC and in accordance with the provisions of the IBC, 2016 and relevant regulations. The appointment of the liquidator and subsequent directions marked the initiation of the liquidation process, bringing an end to the insolvency resolution efforts for the corporate debtor.
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