2018 (9) TMI 1952 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(1) of the Insolvency Bankruptcy Code, 2016 - HELD THAT - The Resolution Professional moved this application for passing order under Section 33(1) to liquidate the Corporate Debtor. Upon hearing the argument on the side of the Ld. Counsel appearing for the Resolution Professional at length, it is satisfying that this is a fit case in which liquidation of the Corporate Debtor is to be ordered in accordance with Section 33(1), Chapter III of the Insolvency and Bankruptcy Code, 2016. Therefore, the application is liable to be allowed. The Corporate Debtor Shree Ganesh Jewellery House (I) Limited is directed to be liquidated in the manner as laid down in Chapter III, Part II of the Insolvency and Bankruptcy Code, 2016 read with Section 33(1) of the I B Code, 2016 - application allowed.

Summary

Issues:
1. Application for liquidation of Corporate Debtor under Section 33(1) of the Insolvency & Bankruptcy Code, 2016.
2. Inability to prepare Information Memorandum due to non-cooperation of investigating agencies and enforcement authorities.
3. Failure to identify prospective resolution applicant within stipulated period.
4. Decision to liquidate Corporate Debtor by Committee of Creditors.
5. Appointment of Resolution Professional as Liquidator.

Analysis:
1. The application was filed by the Resolution Professional seeking liquidation of the Corporate Debtor under Section 33(1) of the Insolvency & Bankruptcy Code, 2016. The Resolution Professional faced challenges in preparing the Information Memorandum due to the non-availability of relevant records, including annual returns, which were seized by investigating agencies. Despite efforts to trace the necessary information, the Resolution Professional encountered obstacles, such as assets being held by enforcement agencies and non-cooperation from authorities.

2. The Corporate Debtor's lack of cooperation hindered the Resolution Professional's ability to identify a prospective resolution applicant within the mandated period. Requests for asset details from investigating agencies went unanswered, and efforts to extend the Corporate Insolvency Resolution Process (CIRP) beyond 180 days failed due to insufficient vote share from the Committee of Creditors. Consequently, the decision to liquidate the Corporate Debtor was made based on various grounds, including the account being declared as fraudulent and inoperative since 2015.

3. With no Resolution Plan received during the CIRP period and the Committee of Creditors opting for liquidation with a significant vote share, the Resolution Professional moved the application for liquidation under Section 33(1). After thorough consideration, the Tribunal found the case suitable for liquidation in accordance with the Insolvency and Bankruptcy Code, 2016. The Resolution Professional was appointed as the Liquidator to oversee the liquidation process.

4. The Tribunal issued specific directions for the liquidation process, including appointing the Resolution Professional as the Liquidator, issuing public announcements, communicating the order to relevant authorities, and initiating the liquidation proceedings as per the Code's provisions. The Liquidator was instructed to file necessary reports within specified timelines, and the fees payable to the Liquidator were outlined as part of the liquidation cost.

5. The judgment concluded by disposing of the application and instructing the distribution of the order to the Liquidator, financial creditor, and Corporate Debtor for information and further action. Additionally, provisions were made for the urgent supply of certified copies of the order to concerned parties upon compliance with formalities.