2022 (10) TMI 204 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since the COC in its commercial wisdom has resolved to take the Corporate Debtor in liquidation, it is opined that the decision of the COC should not be interfered with. The present application seeking liquidation of the Corporate Debtor M/s. Platino Classic Motors (India) Pvt. Ltd., in the manner laid down in Chapter III of Part II of the Code is allowed. Application allowed - Moratorium declared.

Summary

Issues:
Liquidation of Corporate Debtor M/s. Platino Classic Motors (India) Pvt. Ltd. under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Application for Liquidation:
The Resolution Professional (RP) filed an application under Section 33(2) of the Code for liquidation of the Corporate Debtor, M/s. Platino Classic Motors (India) Pvt. Ltd. The RP was appointed as the Interim Resolution Professional and subsequently as RP. Due to insufficient information about the assets, an extension was sought for the Corporate Insolvency Resolution Process (CIRP). The CoC issued invitations for Expression of Interest, but only one application was received from a consortium. Despite requests for a revised Resolution Plan, the CoC rejected it due to unsatisfactory creditor amounts, lack of fund source disclosure, and low evaluation matrix score.

2. CoC Decision for Liquidation:
As no viable Resolution Plans were available, the CoC decided to seek liquidation of the Corporate Debtor. The CoC approved the RP as the Liquidator and estimated liquidation costs. The CoC also resolved to approve the CIRP expenditure incurred. The RP was directed to serve the application to suspended management, who objected to liquidation citing group insolvency and offering an improved resolution plan.

3. Tribunal's Observations and Decision:
The Tribunal noted the CoC's resolution for liquidation with a high voting share and rejected the ex-management's objections. The Tribunal highlighted the relevant provision of Section 33(2) of the Code and upheld the CoC's decision based on commercial wisdom. The Tribunal allowed the application for liquidation and appointed a Liquidator with specific directions for the liquidation process. The moratorium under Section 14 ceased, and a new moratorium under Section 33(5) commenced. The Order was forwarded to relevant authorities for compliance and issuance of certified copies.

Conclusion:
The Tribunal approved the liquidation of M/s. Platino Classic Motors (India) Pvt. Ltd. based on the CoC's decision and appointed a Liquidator to oversee the process. The objections raised by the suspended management were rejected, and the Tribunal upheld the CoC's resolution for liquidation in line with the Insolvency and Bankruptcy Code.