2023 (3) TMI 954 - AT - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - non-execution of decrees - Section 33 of I B Code - HELD THAT - Admittedly, the Appellant is an Association ventilating its grievance against appointment of the Respondent as Liquidator. The fact remains that the RP has not challenged the appointment of this Respondent as Liquidator and this Tribunal does not find any allegations against this Respondent. No one aggrieved against the appointment of this Respondent as Liquidator except the Appellant and no genuine cause or reason shown neither any illegality or irrational has been pointed out by the Appellant except mere appointment as Liquidator by the Adjudicating Authority. Moreover, the Appellant failed to explain that the Adjudicating Authority lacks jurisdiction in appointing the Respondent as Liquidator. Furthermore, the CoC it its 4 th meeting held on 07.08.2018 passed a Resolution and decided to appoint the Respondent as Liquidator. It is to be presumed that the CoC in its commercial wisdom has taken a decision and reposed its confidence in the Respondent to act as Liquidator. Further, this Tribunal in SANDEEP KUMAR GUPTA VERSUS STEWARTS AND LLOYDS OF INDIA LTD. AND ANR. 2018 (4) TMI 276 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, KOLKATA held that the observations made in the impugned order should not be construed to be misconduct on the part of the Appellant, but as we find that the Adjudicating Authority was not satisfied with the performance of the Resolution Professional , we hold that the Adjudicating Authority was well within its jurisdiction to engage another person as Resolution Professional or Liquidator . Without going into the other aspects of the case this Tribunal is of the view that the order under challenge was passed by the Adjudicating Authority on 01.09.2020 and till passing of this order, if the period is taken into consideration from the date on which the impugned order was passed i.e. 01.09.2020, much time has passed i.e. more than 2 years and it would be a futile exercise if the order is interfered with, keeping in view of the time bound proceedings of the IBC. This Tribunal comes to a resultant conclusion that the Appellant has not made out a prima-facie case to be interfered with the order passed by the Adjudicating Authority - appeal dismissed.

Summary

Issues involved:
The appeal against the appointment of Liquidator under Section 61 of the Insolvency & Bankruptcy Code, 2016.

Brief Facts:
The Appellant, a trust registered under the Indian Trust Act, challenged the appointment of the Respondent as Liquidator of the Corporate Debtor. The Corporate Debtor was under Corporate Insolvency Resolution Process (CIRP) and the Respondent was appointed as Liquidator by the Committee of Creditors (CoC) despite the Resolution Professional's willingness to continue. The Appellant alleged violations of Section 34(1) and Section 34(4) of the IBC, 2016. The Appellant filed an appeal seeking to set aside the appointment of the Respondent as Liquidator.

Appellant's Submissions:
The Appellant, as a shareholder of the Corporate Debtor, challenged the appointment of the Respondent as Liquidator, citing violations of relevant provisions of the IBC, 2016. The Appellant prayed for setting aside the appointment of the Respondent based on the facts presented.

Respondent's Submissions:
The Respondent denied the Appellant's allegations and stated that the Adjudicating Authority lawfully appointed the Respondent as Liquidator. The Respondent argued that the Appellant lacked standing to challenge the appointment and that the CoC's decision to appoint the Respondent was valid. The Respondent relied on a previous Tribunal decision to support their position.

Analysis / Appraisal:
The Tribunal considered the arguments presented by both parties. It noted that the Appellant was the only party challenging the appointment of the Respondent as Liquidator, with no objections raised by the Resolution Professional. The Tribunal found no evidence of misconduct or lack of jurisdiction in the appointment process. It highlighted the CoC's decision and commercial wisdom in appointing the Respondent. Referring to a previous case, the Tribunal emphasized the authority of the Adjudicating Authority to engage a new Liquidator if necessary.

Conclusion:
The Tribunal concluded that the Appellant failed to establish a prima facie case to interfere with the Adjudicating Authority's order appointing the Respondent as Liquidator. The appeal was deemed meritless and dismissed without costs, with any pending applications closed.