2022 (4) TMI 431 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - Section 33(1)(a) of Insolvency Bankruptcy Code, 2016 - HELD THAT - The primary object of IBC is resolution and liquidation is the last resort. At the same time keeping the timelines prescribed under the IBC is paramount, lest asset value gets deteriorated. Therefore, taking into consideration the provisions of law as well as the documents on record, this Adjudicating Authority is of the view that since the efforts to obtain resolution of the Corporate Debtor have failed, the only option left under the circumstances being early liquidation process, this petition is allowed, directing the liquidation of the Corporate Debtor. The Corporate Debtor, M/s. Sri Parameswara Poultry Farm Private Limited, is put under liquidation process in the manner laid down in Chapter-III of the Code with effect from the date of order - Application allowed.

Issues Involved:
1. Application for liquidation of Corporate Debtor under Section 33(1)(a) of Insolvency & Bankruptcy Code, 2016.
2. Delay in filing the liquidation application.
3. Dissent by a member of the Committee of Creditors (CoC) regarding withdrawal of Corporate Debtor from Corporate Insolvency Resolution Process (CIRP).
4. Rejection of the Resolution Professional's appointment as Liquidator by the CoC.
5. Appointment of a new Liquidator.
6. Compliance and procedural steps post-liquidation order.

Analysis:
1. The Resolution Professional (RP) filed an application under Section 33(1)(a) of the Insolvency & Bankruptcy Code, 2016, seeking the liquidation of the Corporate Debtor, M/s. SRI PARAMESWARA POULTRY FARM PRIVATE LIMITED. The CIRP period ended after extensions and the CoC decided to proceed with liquidation due to the failure to obtain a resolution plan within the prescribed timeline.

2. The RP requested to condone a 20-day delay in filing the application due to the CoC's request for an extension of the voting timeline. The Tribunal allowed the condonation and proceeded with the liquidation order.

3. A member of the CoC dissented regarding the withdrawal of the Corporate Debtor from CIRP, leading to the decision to proceed with liquidation. Despite the RP's consent to act as Liquidator, the CoC rejected the appointment, necessitating the appointment of a new Liquidator, Mr. Kasa Venkata Ramaniah.

4. The Tribunal emphasized the importance of timely resolution and the maximization of assets under the IBC. The decision to liquidate was based on the failure to secure a resolution plan within the stipulated timeline, making liquidation the only viable option.

5. The order detailed the procedural steps post-liquidation, including the handover of records to the new Liquidator, cessation of moratorium, transfer of powers to the Liquidator, compliance with regulations, and the Liquidator's entitlement to fees. The Liquidator was tasked with managing the affairs of the Corporate Debtor and ensuring compliance with the IBC and relevant regulations.

6. The order emphasized the cooperation required from personnel connected with the Corporate Debtor and notified relevant authorities about the liquidation process. The Liquidator was directed to manage the affairs efficiently to maximize asset value and avoid delays that could lead to value destruction.

This detailed analysis covers the key issues addressed in the judgment, outlining the decision to liquidate the Corporate Debtor and the subsequent procedural steps to be followed post-liquidation.

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