2022 (7) TMI 461 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - no Interim Resolution Professional was proposed by the operational creditor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor i.e. Calzini Fashions Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. Application allowed.

Issues Involved:
1. Application for liquidation of Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.
2. Continuation of the Resolution Professional as Liquidator.
3. Exclusion of the lockdown period from CIRP timeline.
4. Remittance of expenses and fees to the Resolution Professional and counsel of the Corporate Debtor.

Issue-wise Detailed Analysis:

1. Application for liquidation of Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016:
The Resolution Professional filed an application to liquidate the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Committee of Creditors (CoC) in its fourth meeting held on 06.01.2021 decided to liquidate the Corporate Debtor and appointed the Resolution Professional as Liquidator. The Tribunal noted the satisfaction of the conditions under Section 33 of the Code and directed the Corporate Debtor to be liquidated as per Chapter III of the Code.

2. Continuation of the Resolution Professional as Liquidator:
The application prayed for Mr. Naresh Kumar Goel, the Resolution Professional, to continue as Liquidator under Section 34(1) of the IBC Code, 2016. The Tribunal observed that the CoC had resolved to appoint Mr. Naresh Kumar Goel as Liquidator in its 4th meeting on 06.01.2021, and he had filed his consent. The Tribunal appointed Mr. Naresh Kumar Goel as Liquidator, directing him to take custody and control of the assets and property of the Corporate Debtor immediately.

3. Exclusion of the lockdown period from CIRP timeline:
The application sought to exclude the period of lockdown from 22.03.2020 to 15.11.2020 from the CIRP timeline. The Tribunal allowed this prayer, noting that the exclusion had been granted by order dated 05.01.2022.

4. Remittance of expenses and fees to the Resolution Professional and counsel of the Corporate Debtor:
The application claimed a total amount of Rs.18,81,644/- as expenses and fees payable to the RP and counsel of the Corporate Debtor. The Tribunal found the claim unjustified and exorbitant, considering the limited workload involved. It limited the claim to the maximum stipulated period of 180 days, amounting to Rs.3,54,000/- at the rate of Rs.50,000/- per month plus taxes, as approved by the CoC. Additionally, Rs.50,000/- was granted for the lockdown period and Rs.40,000/- for out-of-pocket expenses, totaling Rs.4,44,000/-. No expenses were allowed after filing the liquidation application.

Orders Passed:
1. The Corporate Debtor is liquidated with immediate effect.
2. Mr. Naresh Kumar Goel is appointed as Liquidator.
3. The Liquidator is directed to take custody and control of the Corporate Debtor's assets and make a public announcement.
4. The provisions of Section 33(5), (6), and (7) of the IBC, 2016 come into force immediately.
5. The Moratorium under Section 14 of the IBC ceases, and a fresh Moratorium under Section 33(5) commences.
6. The order serves as a notice of discharge to the Corporate Debtor's officers, employees, and workmen.
7. The Liquidator must submit a Preliminary Report within 75 days and regular progress reports subsequently.
8. The Liquidator is directed to recover trade receivables and other credits.
9. No suit or legal proceeding shall be instituted by or against the Corporate Debtor, except with the Liquidator's liberty to do so with prior approval.
10. All powers of the Board of Directors and key managerial personnel cease and vest in the Liquidator.
11. The Corporate Debtor's personnel must cooperate with the Liquidator.
12. The Registry is directed to communicate the order to the Corporate Debtor and the Registrar of Companies.
13. The Registrar of Companies must update the Master Data and send a compliance report within 30 days.
14. The Registry and Liquidator must communicate the order to the Insolvency and Bankruptcy Board of India.
15. The Liquidator may seek directions from the Tribunal during the Liquidation Process.

Conclusion:
IA No. 229/2021 stands allowed and disposed of accordingly.

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