2023 (11) TMI 482 - AT - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - no resolution plan has been received in the CIRP - HELD THAT - When no resolution plan has come up in the CIRP, Liquidation is only option which was rightly resolved by the CoC in its meeting. The Adjudicating Authority did not commit any error in allowing the Application of Resolution Professional for liquidation. So far as litigation by Suspended Director against the Bank, there was no occasion to RP to pursue the same as far as any litigation on behalf of the Company, leave of the Court was required for pursuing the said application which admittedly has not been obtained. We see no substance in the above submission of the Appellant. Appeal dismissed.

Summary

Issues involved:
The appeal against the Order allowing liquidation of the Corporate Debtor and rejecting various reliefs prayed for by the Appellant.

Liquidation Order and Rejection of Reliefs:
The Adjudicating Authority allowed the Resolution Professional's application for liquidation of the Corporate Debtor and rejected the Appellant's I.A. No. 25/AHM/2023 which sought to set aside the Corporate Insolvency Resolution Process. The CoC resolved for liquidation due to the absence of a resolution plan in the CIRP, a decision upheld by the Adjudicating Authority.

Challenge to CIRP and Liquidation Decision:
The Appellant challenged the CIRP process and the decision for liquidation, contending that the Resolution Professional did not follow the IBC scheme and raised allegations against them. However, the Tribunal found no merit in these contentions as the CoC's decision for liquidation was justified in the absence of a resolution plan.

Appellant's Proposal in Liquidation:
The Appellant expressed interest in proposing a scheme during liquidation, asserting their eligibility under Section 29A as per the Liquidation Process Regulations, 2016. The Tribunal acknowledged this submission but dismissed the appeal, upholding the decision for liquidation.

Litigation Concerns:
The Appellant raised concerns about pending litigation involving the Company and the Suspended Director against the Bank, suggesting that the Resolution Professional should have pursued these matters. The Tribunal clarified that there was no need for the RP to pursue the Director's litigation against the Bank, and any litigation on behalf of the Company required court approval, which was not obtained in this case.

Conclusion:
After considering the submissions and records, the Tribunal dismissed the appeals, emphasizing that the CoC's decision for liquidation was appropriate in the absence of a resolution plan. The Tribunal found no errors in the Adjudicating Authority's decision to allow the Resolution Professional's application for liquidation.