2021 (11) TMI 906 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(3) and 33(4) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - All necessary directions requiring liquidation of Corporate Debtor has been passed duty - all necessary compliances have been made. The Corporate Debtor M/s. Palm Lagoon Backwater Resorts Private Limited is hereby put under liquidation with immediate effect under Section 33(1) of IBC, 2016 - application allowed.

Issues Involved:
1. Liquidation of the Corporate Debtor under Section 33(3) and 33(4) of the Insolvency and Bankruptcy Code, 2016.
2. Appointment of the Applicant as the Liquidator.
3. Compliance with the directions of the NCLAT.
4. Forfeiture of the performance guarantee.
5. Remuneration for the Chairman of the Monitoring Committee.

Detailed Analysis:

1. Liquidation of the Corporate Debtor:
The application was filed under Section 33(3) and 33(4) of the Insolvency and Bankruptcy Code, 2016, seeking an order of liquidation for Palm Lagoon Backwater Resorts Private Limited. The Assets Reconstruction Company (India) Limited initially filed an application under Section 7 of the IBC, which was admitted by the NCLT, Kochi Bench. A Resolution Plan was approved by the Committee of Creditors (CoC) and subsequently by the Tribunal. However, the Resolution Applicant failed to implement the plan due to non-compliance with RBI guidelines, leading to the demand for liquidation.

2. Appointment of the Applicant as the Liquidator:
The application also sought the appointment of the Applicant, who was the erstwhile Resolution Professional, as the Liquidator for the Corporate Debtor. This was in accordance with Section 34(1) of the Code. The NCLT, Kochi Bench, eventually appointed Shri. R. Velu as the Liquidator, directing him to manage the affairs of the Corporate Debtor and to issue a public notice stating the liquidation status.

3. Compliance with the Directions of the NCLAT:
The NCLAT, in its order dated 21.09.2021, directed the NCLT, Kochi Bench, to pass an order of liquidation for the Corporate Debtor. The NCLAT emphasized that the insolvency resolution process must be completed within 330 days, and since the Resolution Applicant failed to implement the plan, the liquidation order was mandated. The NCLT complied with this directive, setting aside its previous order and initiating the liquidation process.

4. Forfeiture of the Performance Guarantee:
The Monitoring Committee, during its meetings, resolved to forfeit the performance guarantee of ?25,00,000/- provided by the Resolution Applicant due to non-payment of the plan value and failure to implement the approved Resolution Plan. The Financial Creditor insisted on this forfeiture, noting that the Resolution Applicant had ample time and opportunity to comply with the plan but failed to do so.

5. Remuneration for the Chairman of the Monitoring Committee:
The Monitoring Committee also discussed the remuneration for the Chairman, Mr. Velu, who was to receive ?1,00,000/- as per the approved Resolution Plan. The Resolution Applicant requested that this fee be included as a prayer in the application filed with the NCLT, as the management was unwilling to make the payment. The NCLT directed that the Liquidator's fee be fixed at ?2,00,000/- plus applicable GST and actual expenses, as per the CoC's decision.

Conclusion:
The NCLT, Kochi Bench, ordered the liquidation of Palm Lagoon Backwater Resorts Private Limited, appointing Shri. R. Velu as the Liquidator. The Tribunal directed the liquidation process to be carried out in accordance with Chapter III of the IBC, 2016, and ensured compliance with the NCLAT's directives. The performance guarantee was forfeited due to non-compliance by the Resolution Applicant, and the Liquidator's remuneration was fixed as per the CoC's resolution.

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