2018 (10) TMI 775 - Tri - Insolvency and Bankruptcy

Liquidation of corporate debtor - Application filed u/s. 33 of the Insolvency and Bankruptcy Code, 2016 praying for liquidation of the corporate debtor, Bajrangbali Alloys Private Limited - non-receipt of any Resolution Plan to takeover the stressed assets of the corporate debtor - Held that - On a careful screening of the Progress Reports it is understood that the corporate debtor in the case in hand was non-operational even on the date of filing of this application by the financial creditor and is a closed entity. It has completely closed down its business with no workmen or employees. It is also understood that the Resolution Professional was unable to trace out the books of account and thereby constrained to prepare the Information Memorandum based on information sourced from public domain. However, upon invitation of Resolution Plan no resolution applicant showed any interest to participate in the CIRP and thereby the CoC after due deliberation and discussions decided not to extend the period of CIR P beyond 180 days which has been expired on 13/08/2018. Adjudicating Authority has no other alternative than to pass an order of liquidation requiring the corporate debtor to be liquidated in the manner as laid down in Chapter III of Part II read with Section 33(1) of the Insolvency and Bankruptcy Code, 2016. The Ld. RP was asked to submits his willingness to continue as the Liquidator and since he expressed his consent the RP is to be appointed as the liquidator. In the result the application is allowed by ordering liquidation of the corporate debtor, namely, Bajrangbali Alloys Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016,

Summary

Issues:
1. Application for liquidation of corporate debtor under section 33 of the Insolvency and Bankruptcy Code, 2016.
2. Decision of Committee of Creditors (CoC) not to extend Corporate Insolvency Resolution Process (CIRP) period.
3. Grounds for liquidation application by Resolution Professional (RP).
4. Examination of the case and order for liquidation by the Adjudicating Authority.
5. Appointment of RP as Liquidator and related directions.

Analysis:
1. The application sought liquidation of the corporate debtor, Bajrangbali Alloys Private Limited, under section 33 of the Insolvency and Bankruptcy Code, 2016 due to the absence of any Resolution Plan to take over the stressed assets of the company. The CoC decided on liquidation as no resolution plan was received within the stipulated time frame.

2. The CoC, in a meeting held on 13/07/2018, unanimously decided not to extend the CIRP period beyond 180 days and opted for the liquidation of the corporate debtor. This decision was based on the lack of interest from potential resolution applicants and the non-operational status of the company.

3. The RP filed the liquidation application citing several grounds, including the non-operational status of the corporate debtor, absence of employees or workmen, lack of valuable assets apart from land and building, and the dilapidated condition of the factory sheds and administrative buildings. The RP highlighted that liquidation would not impact the socioeconomic environment and would facilitate the speedy sale of remaining assets.

4. The Adjudicating Authority, after reviewing the case details and progress reports, concluded that the corporate debtor was non-operational, lacked employees, and no resolution applicant expressed interest in the CIRP. Consequently, the Authority ordered the liquidation of the corporate debtor as per the provisions of the Insolvency and Bankruptcy Code, 2016.

5. Following the order for liquidation, the RP was appointed as the Liquidator, with specific directions issued regarding public announcements, communication with relevant authorities, cessation of moratorium, discharge of officers and employees, and the liquidation process timeline. The Liquidator was instructed to submit a Preliminary Report within seventy-five days from the commencement date of the liquidation process.

This comprehensive analysis encapsulates the key issues, decisions, grounds, and directives outlined in the judgment by the National Company Law Tribunal, Kolkata.