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2023 (11) TMI 908 - AT - Insolvency and BankruptcyLiquidation of Corporate Debtor - section 33 of IBC - HELD THAT - It is an admitted fact that there was no Resolution Plan which was approved by the CoC, prior to the expiry of the CIRP Period and therefore, the Adjudicating Authority passed the Liquidation Order as mandated under Section 33 (2) of the Code. Having regard to the fact that the CIRP period of 270 days was over and the CoC had voted in favour of Liquidation of the Corporate Debtor Company with a 100 % majority, there are no substantial reasons in the argument of the Learned Counsel for the Appellant that their Plan ought to have been considered. The material on record establishes that Section 33 (1) (a) (i) and Section 33 (2) of the Code have been satisfied, IBC is a time bound process and the commercial wisdom of the CoC is to be given paramount importance for approval/rejection of a Resolution Plan. The Hon ble Supreme Court in a catena of Judgments namely, KALPRAJ DHARAMSHI ANR. VERSUS KOTAK INVESTMENT ADVISORS LTD. ANR. 2021 (3) TMI 496 - SUPREME COURT , K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT has laid down that the Judicial review of the Tribunals is limited in terms of impeding the commercial wisdom of the CoC except when a Plan is not in adherence to Section 30 (2) of the Code. In the instant Case, there is no Resolution Plan in the offing, and the CoC has approved the Liquidation with a 100 % Voting as mandated under Section 33 of the Code, and there being no possibility of sale of the Corporate Debtor as a Going Concern , there are no substantial grounds to interfere with the well-considered Order of the Adjudicating Authority and hence, this Company Appeal is dismissed accordingly.
Issues involved:
The issues involved in this case include the approval of liquidation of a corporate debtor company by the Adjudicating Authority, the role of the Resolution Professional (RP) in the insolvency process, the consideration of resolution plans by the Committee of Creditors (CoC), and the application of Section 33 of the Insolvency and Bankruptcy Code, 2016. Issue 1: Approval of Liquidation by Adjudicating Authority The Appellant, a Suspended Director and Promoter of the Corporate Debtor Company, appealed against the Impugned Order allowing the liquidation of the company. The Adjudicating Authority approved the liquidation based on the CoC's decision and the completion of the CIRP Period of 270 days. Issue 2: Role of Resolution Professional The Appellant argued that the RP did not adequately consider their resolution plan and instead filed an application for liquidation. Allegations of collusion between the RP and Resolution Applicants were raised, and concerns were expressed about the RP's failure to explore options to revive the company before opting for liquidation. Issue 3: Consideration of Resolution Plans by CoC Despite objections from the Appellant, the CoC approved the liquidation with a 100% majority, rejecting the Appellant's resolution plan. The Appellant contended that their plan should have been given due consideration before proceeding with liquidation. Issue 4: Application of Section 33 of the Code The Adjudicating Authority passed the liquidation order under Section 33(2) of the Code since no resolution plan was approved by the CoC before the CIRP Period ended. The Tribunal upheld the Authority's decision, emphasizing the time-bound nature of the insolvency process and the importance of CoC's commercial wisdom in such matters. Judgment Summary: The Tribunal dismissed the Company Appeal (AT) (CH) (Ins) No. 359/2023, upholding the Adjudicating Authority's decision to approve the liquidation of the Corporate Debtor Company. The Tribunal found no substantial grounds to interfere with the well-considered order, as the CoC had approved the liquidation with a 100% vote as required by Section 33 of the Code. The absence of a viable resolution plan and the completion of the CIRP Period supported the decision for liquidation. The Tribunal highlighted the limited scope of judicial review in matters concerning the commercial wisdom of the CoC, citing relevant judgments to emphasize the importance of adhering to the provisions of the Code in insolvency proceedings.
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