2021 (11) TMI 789 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is evident from the record that in compliances of Section 21 of Code read with Rule 6 8 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulation), the IRP constituted CoC - the CoC in the 4th meeting held on 11.05.2021 had unanimously resolved to liquidate the Corporate Debtor and also resolved to appoint the Applicant herein Mr. Darshan Bharatbhai Patel bearing registration No. IBBI/IPA-001/IP-P01579/2018-19/12442 as a liquidator under Section 34 (4) of the Code. Further in accordance with Regulation 39D of CIRP Regulations, liquidator's fee was fixed to the tune of ₹ 40,000/- per month. Shri Rushi Dattani, being suspended management present in the 4'h meeting of CoC stated that he has no objection if the Corporate Debtor is liquidated. The Corporate Debtor is ordered to be liquidated - liquidation of the Corporate Debtor is effective from the date of this order and the Moratorium declared vide order dated 03.02.2021 - application allowed.

Summary

Issues:
Liquidation of Corporate Debtor M/s. Padmavati Intermediates Pvt. Ltd. under Section 33 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. Admission of Application and Appointment of Resolution Professional (RP):
The Adjudicating Authority admitted the application under Section 9 of the Code for Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. Mr. Darshan Bharatbhai Patel was appointed as the Interim Resolution Professional (IRP) and later confirmed as the RP in the 1st COC meeting.

2. Decision to Liquidate:
The Committee of Creditors (CoC) in its meetings decided that due to the lack of assets with the Corporate Debtor, the chance of resolution was minimal. Consequently, the CoC unanimously resolved to liquidate the Corporate Debtor and appointed Mr. Darshan Bharatbhai Patel as the liquidator under Section 34(4) of the Code.

3. Legal Provisions and Precedent:
The order of liquidation was passed in accordance with Section 33 of the Code. The judgment cited a precedent where the decision of the CoC to recommend liquidation based on proper evaluation of assets and liabilities was deemed a business decision beyond judicial review.

4. Directions and Orders:
The Tribunal issued various directions, including the effective date of liquidation, appointment of the RP as the Liquidator subject to filing consent, actions to be taken by the liquidator as per regulations, restrictions on legal proceedings, transfer of powers to the Liquidator, and publication of public announcements for stakeholders to submit claims.

5. Pending Applications:
The judgment noted pending applications under different sections of the Code, directing them to be listed along with the main matter. The Liquidator was allowed to move appropriate applications for the prosecution of these matters.

6. Administrative Directives:
The Registry was instructed to upload the order on the official website and send authenticated copies to relevant parties. The present application was disposed of accordingly.

This detailed analysis summarizes the key aspects of the judgment regarding the liquidation of the Corporate Debtor under the specified legal provisions and procedural requirements.