2023 (10) TMI 68 - AT - Insolvency and Bankruptcy

CIRP - validity of liquidation order - Seeking consideration of Resolution Plan - Appeals have been filed by both the Appellant stating that they were willing to give a higher offer but without considering their offer liquidation order has been passed - HELD THAT - The ends of justice be served in giving one opportunity to the CoC to consider the Plan/Revised Offer and take decision on the said offer. It is well settled that objective of the IBC is to revive the Corporate Debtor and liquidation is the last resort. In view of the aforesaid, the order directing for liquidation is set aside and the CIRP extended for a period of 60 days from today to complete the process - It is made clear that in event Resolution Plan is approved, an application be filed for approval of the plan before Adjudicating Authority. In event, Resolution Plan is not approved, the Resolution Professional shall immediately file application for liquidation. Appeal disposed off.

Summary

Issues Involved:
- Appeal against the order allowing liquidation application without considering higher offer from appellants.

Summary:
The Appellate Tribunal heard two appeals against an order passed by the Adjudicating Authority allowing a liquidation application filed by the Resolution Professional. The appellants contended that they were willing to provide a higher offer, but their offers were not considered before the liquidation order was passed.

In Company Appeal (AT) (Insolvency) No.657 of 2023, the appellants, who were resolution applicants, argued that their plans were not approved, and the order for liquidation was unjustified. The Committee of Creditors (CoC) had not provided reasons for rejecting their plans. The CoC mentioned that the plans were not approved with 100% votes, and an auction notice had been issued for the sale. The appellants were given the opportunity to enhance their offers to the Liquidator, and the appeals were listed for further hearing.

In a subsequent order, the CoC informed the Tribunal about a revised offer submitted by one appellant, while the other appellant had not submitted a revised offer. The CoC stated that the offer from the first appellant was acceptable if the Tribunal allowed the withdrawal of the liquidation process and extended the time for Corporate Insolvency Resolution Process (CIRP). The Tribunal decided to give the CoC one more opportunity to consider the revised offer and make a decision.

Considering the objective of the Insolvency and Bankruptcy Code (IBC) to revive the Corporate Debtor, the Tribunal set aside the order for liquidation and extended the CIRP for 60 days to complete the process. It was clarified that if the Resolution Plan was approved, an application should be filed for approval before the Adjudicating Authority. If the Resolution Plan was not approved, the Resolution Professional should promptly file an application for liquidation. The CoC was instructed to consider only the revised offer submitted by one of the appellants. Both appeals were disposed of accordingly.