2022 (5) TMI 1309 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - no Resolution Plan has been approved by the CoC - CoC by 100% voting share approved liquidation of the Corporate Debtor - HELD THAT - This is a case where Resolution Plan, though received, but the same was not approved by the CoC., and the period of CIRP has expired. Therefore, there is no alternative but to order the liquidation of the Corporate Debtor. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - Application allowed.

Summary

Issues:
Liquidation of Corporate Debtor due to non-approval of Resolution Plan by CoC.

Detailed Analysis:
1. The Tribunal received an application from the Resolution Professional seeking liquidation of the Corporate Debtor as no Resolution Plan was approved by the Committee of Creditors (CoC), and the CoC approved liquidation by 100% voting share.

2. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a petition by a Financial Creditor under the Insolvency and Bankruptcy Code, 2016. The Interim Resolution Professional (IRP) was appointed, and subsequent steps were taken as per the Code.

3. Despite receiving Resolution Plans from prospective Resolution Applicants, the CoC did not approve any plan. The CoC meetings were held to discuss the plans, and ultimately, the Resolution Plan submitted by one applicant was rejected for not attaining the required voting share, leading to the decision for liquidation.

4. The Adjudicating Authority directed the CoC to consider a specific Resolution Plan, but even after subsequent meetings, the plan was rejected, resulting in the order for liquidation of the Corporate Debtor.

5. The Tribunal ordered the liquidation of the Corporate Debtor in accordance with the provisions of the Code. The Resolution Professional was appointed as the Liquidator, and the liquidation process was directed to be initiated as per the relevant regulations.

6. Various directions were given regarding the cessation of powers of the Board of Directors, issuance of public notice, cooperation with the Liquidator, and restrictions on legal proceedings against the Corporate Debtor during liquidation.

7. The order served as a notice of discharge to the officers, employees, and workmen of the Corporate Debtor, except for ongoing business matters managed by the Liquidator.

8. The Liquidator was instructed to file a copy of the order with the Registrar of Companies and comply with other statutory requirements as per the Code.

9. The application for liquidation was disposed of, and further directions were given for periodical reporting and dissemination of the order to all concerned parties.

10. The Registry was directed to provide certified copies of the order upon completion of formalities, ensuring compliance with the Tribunal's directives.