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2021 (12) TMI 344 - Tri - Insolvency and BankruptcySeeking liquidation of the Corporate Debtor - no resolution plan was approved by the Committee of Creditors - section 33 of the Insolvency Bankruptcy Code, 2016 - HELD THAT - Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating Authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 97.04% voting share to liquidate the Corporate Debtor. There is no purpose in directing the RP to collate the claim. The claimant can now file the claim with the Liquidator afresh in accordance with the Liquidation Process Regulations. Therefore, the present application becomes infructuous, and is dismissed as such.
Issues: Application for liquidation of Corporate Debtor; Appointment of liquidator; Ceasing of Moratorium; Powers of Board of Directors; Assistance to Liquidator; Legal proceedings during liquidation; Payment of fees to liquidator; Filing of reports by liquidator; Admission of claim by RP.
Analysis: 1. Application for Liquidation of Corporate Debtor: The judgment pertains to an application filed by the Resolution Professional (RP) upon the instructions of the Committee of Creditors (CoC) seeking liquidation of the Corporate Debtor, Chaudhary Ingots Pvt. Ltd., due to the absence of an approved resolution plan by the CoC. The RP filed the application under section 33(2) of the Insolvency & Bankruptcy Code, 2016, before the Adjudicating Authority for liquidation of the Corporate Debtor. 2. Appointment of Liquidator: The Adjudicating Authority, in accordance with section 33(2) of the Code, approved the application for liquidation and appointed the RP, Mr. Sandeep Goel, as the liquidator for Chaudhary Ingots Pvt. Ltd. The appointment was subject to the liquidator possessing a valid Authorisation for Assignment issued by the Insolvency Professional Agency, as per the relevant regulations. 3. Ceasing of Moratorium: The judgment ordered that as a consequence of the liquidation application being allowed, the Moratorium under section 14 of the Code ceased to have effect. A fresh Moratorium under Section 33(5) of the Code was to commence from the date of the order, thereby impacting the powers of the Board of Directors and key managerial persons. 4. Assistance to Liquidator: All personnel of the Corporate Debtor were directed to extend assistance and cooperation to the appointed Liquidator, Mr. Sandeep Goel, as required in managing the liquidation process of the Corporate Debtor. 5. Legal Proceedings During Liquidation: The judgment specified that upon initiation of the liquidation process, no suit or other legal proceeding could be instituted by or against the Corporate Debtor, except with the approval of the Adjudicating Authority, as provided under section 33(5) of the Code. The Liquidator was granted liberty to institute legal proceedings on behalf of the Corporate Debtor. 6. Payment of Fees to Liquidator: The liquidator, Mr. Sandeep Goel, was entitled to fees as per the provisions of the relevant Regulations, with priority as prescribed in Section 53 of the Code. 7. Filing of Reports by Liquidator: The Liquidator was directed to submit a Preliminary Report within seventy-five days from the liquidation commencement date, as per the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Additionally, the Liquidator was required to file quarterly progress reports before the Adjudicating Authority. 8. Admission of Claim by RP: Another application, IA No. 308/2021, was filed by a claimant seeking direction for the RP to admit the claim. However, due to the liquidation order passed in IA No. 22/2021, the application became infructuous, and the claimant was directed to file the claim with the Liquidator afresh in accordance with the Liquidation Process Regulations. In conclusion, the judgment allowed the application for liquidation, appointed the RP as the liquidator, specified the cessation of the Moratorium, outlined the powers and responsibilities of the Liquidator, and addressed the filing of reports and admission of claims during the liquidation process.
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