2022 (8) TMI 1000 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - section 33 of 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. M/s Hike Leather Pvt. Ltd. is directed to be liquidated in the manner as laid down in Chapter III of the Code. The Corporate debtor is liquidated with immediate effect in the manner provided under Chapter III Part II of the IBC 2016 - Application admitted.

Summary

Issues:
1. Initiation of liquidation of the Corporate Debtor under section 33 of the Insolvency and Bankruptcy Code, 2016.
2. Conduct of Committee of Creditors (CoC) meetings and decisions made during the Corporate Insolvency Resolution Process (CIRP).
3. Appointment of Liquidator and approval of liquidation process.

Analysis:
1. Initiation of Liquidation:
The Resolution Professional filed an application under section 33 of the Insolvency and Bankruptcy Code, 2016 for the initiation of liquidation of the Corporate Debtor, M/s Hike Leather Private Ltd. The Adjudicating Authority, after considering the conditions specified under Section 33, directed the immediate liquidation of the Corporate Debtor in accordance with Chapter III of the Code.

2. Committee of Creditors Meetings and CIRP Process:
The Resolution Professional conducted multiple meetings of the Committee of Creditors (CoC) to progress the Corporate Insolvency Resolution Process. Various key decisions were made during these meetings, including the appointment of valuers for asset valuation, issuance of Form G (EOI), appointment of transaction/forensic auditor, and seeking extensions for the CIRP process due to the COVID-19 lockdown. Despite efforts to solicit resolution plans, no viable plan was received, leading to the decision to go for liquidation.

3. Appointment of Liquidator and Liquidation Process:
Following the rejection of the only received Resolution Plan, the CoC resolved to appoint Mr. Jatin Mehra as the Liquidator. The CoC also approved the estimated liquidation cost and the remuneration of the Liquidator. Detailed directions were issued by the Adjudicating Authority regarding the role and responsibilities of the Liquidator, commencement of the liquidation process, submission of reports, recovery of assets, cessation of legal proceedings against the Corporate Debtor, and transfer of powers to the Liquidator. The Registry and Liquidator were instructed to communicate the order to relevant authorities for compliance and record-keeping purposes.

In conclusion, the Adjudicating Authority allowed the application for liquidation and directed the immediate commencement of the liquidation process under the specified provisions of the Insolvency and Bankruptcy Code, 2016. The appointment of Mr. Jatin Mehra as the Liquidator and the approval of the liquidation process by the CoC marked the transition of the Corporate Debtor towards liquidation as a going concern.