2022 (1) TMI 569 - Tri - Insolvency and Bankruptcy

Seeking liquidation of the Corporate Debtor - CIRP period has expired and no resolution plan was received by the Committee of Creditors - HELD THAT - Section 33(1) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process the Adjudicating Authority does not receive a resolution plan under sub-section (6) of section 30. The Corporate Debtor is allowed to be liquidated - application allowed.

Summary

Issues: Application for liquidation of Corporate Debtor due to expiry of CIRP period and absence of resolution plan.

Detailed Analysis:

1. The application filed by the Resolution Professional (RP) with the approval of the Committee of Creditors (CoC) sought liquidation of the Corporate Debtor as no resolution plan was received within the CIRP period. The reliefs sought included liquidation of the Corporate Debtor and confirmation of the RP as the liquidator.

2. The Adjudicating Authority had earlier directed the initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appointed an Interim Resolution Professional (IRP). The public announcement for submitting claims was made, with extensions due to Covid-19 lockdown.

3. The Committee of Creditors was constituted, and subsequent meetings were held, including the decision to liquidate the Corporate Debtor with 100% vote. The RP filed an application for liquidation under section 33(1) of the Insolvency and Bankruptcy Code.

4. The RP, who was also the proposed liquidator, had the necessary authorization and consent to act in that capacity. The Adjudicating Authority was required to pass an order for liquidation if no resolution plan was received within the specified period.

5. The Tribunal, after considering the submissions, ordered the liquidation of the Corporate Debtor in accordance with section 33(1) of the Code. The RP was appointed as the Liquidator to initiate the liquidation process as per the relevant regulations.

6. Various directions were given, including issuing public notices, transferring powers to the Liquidator, and directing cooperation from the Corporate Debtor's personnel. Legal proceedings were restricted, and the liquidation order served as a discharge notice to the officers, employees, and workmen of the Corporate Debtor.

7. The Liquidator was mandated to file a copy of the order with the Registrar of Companies and the Registry for compliance purposes. The application for liquidation was disposed of, and parties were notified to take necessary steps. Certified copies of the order could be issued upon fulfilling formalities.

8. The progress on the main case was scheduled for reporting on a specified date. The judgment provided a detailed and comprehensive analysis of the issues involved in the application for liquidation due to the expiration of the CIRP period and the absence of a resolution plan.