2022 (4) TMI 525 - Tri - Insolvency and Bankruptcy

Seeking liquidation of the Corporate Debtor - Section 33 and 34 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In absence of any Resolution Plan forthcoming the CoC decided to liquidate the corporate debtor as going concern. Thereby, the CoC in the 4th meeting held on 24.08.2021 had unanimously resolved to liquidate the Corporate Debtor as going concern and also resolved to appoint the Applicant herein Mr. Shalabh Kumar Daga as a liquidator under Section 34(4) of the Code. The liquidation of Corporate Debtor is allowed - application allowed.

Issues:
1. Application for liquidation of the Corporate Debtor under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016.
2. Approval and appointment of Resolution Professional.
3. Exclusion of time period during appeal from the Corporate Insolvency Resolution Process (CIRP) period.
4. Decision to liquidate the Corporate Debtor by the Committee of Creditors (CoC).
5. Order of liquidation under Section 33 of the Code and appointment of Liquidator.

Issue 1: Application for liquidation of the Corporate Debtor under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016:
The application was filed by the Resolution Professional of the Corporate Debtor for liquidation under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority had previously admitted an application for Corporate Insolvency Resolution Process (CIRP) and appointed the Resolution Professional. Following due process and compliance with regulations, the Committee of Creditors (CoC) unanimously resolved to liquidate the Corporate Debtor as a going concern, leading to the appointment of the Resolution Professional as the Liquidator under Section 34(4) of the Code.

Issue 2: Approval and appointment of Resolution Professional:
The Resolution Professional was appointed in the first CoC meeting and later confirmed as the Resolution Professional. The Resolution Professional had also filed an appeal challenging the initiation of CIRP, which was dismissed by the Hon'ble NCLAT. The CoC authorized the Resolution Professional to revise dates and manage the resolution process effectively. Subsequently, in the absence of any Resolution Plan, the CoC decided to liquidate the Corporate Debtor as a going concern, leading to the Resolution Professional's appointment as the Liquidator.

Issue 3: Exclusion of time period during appeal from the Corporate Insolvency Resolution Process (CIRP) period:
During the appeal process, the Hon'ble NCLAT excluded the period spent during the appeal from the Corporate Insolvency Resolution Process (CIRP) period. The CoC, in response, unanimously resolved to make an application before the Adjudicating Authority for the exclusion of a specific period due to the Covid-19 pandemic lockdown, which was allowed.

Issue 4: Decision to liquidate the Corporate Debtor by the Committee of Creditors (CoC):
After multiple CoC meetings and extended Expression of Interest processes, the CoC, in its fourth meeting, unanimously resolved to liquidate the Corporate Debtor as a going concern in the absence of any forthcoming Resolution Plan. The CoC further decided to appoint the Resolution Professional as the Liquidator under Section 34(4) of the Code, specifying the minimum monthly fees to be paid to the Liquidator.

Issue 5: Order of liquidation under Section 33 of the Code and appointment of Liquidator:
Considering the facts and provisions of Section 33 of the Code, the Adjudicating Authority ordered the liquidation of the Corporate Debtor. The order specified the effective date of liquidation, appointment of the Resolution Professional as the Liquidator, cessation of powers of the Board of Directors, and key managerial personnel, among other directions. The Liquidator was tasked with completing the liquidation process in accordance with the provisions of the Code and regulations. The order was deemed a notice of discharge to officers, employees, and workmen of the Corporate Debtor, except when the business is continued during liquidation.

In conclusion, the judgment detailed the process leading to the liquidation of the Corporate Debtor, including the appointment of the Liquidator and the necessary steps to be taken to complete the liquidation process in compliance with the Insolvency and Bankruptcy Code and related regulations.

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