2019 (4) TMI 1604 - Tri - Insolvency and Bankruptcy

Order of Liquidation of the Corporate Debtor - Eighth Committee of Creditors meeting held in which the Resolution Professional informed the Members that no Resolution Plan has been received/ proposed nor the Resolution seemed to be possible, it was proposed that the Corporate Debtor Company be liquidated - HELD THAT - Resolution Professional informed that during the entire 270 days of the Resolution Process, claims from Financial Creditors, Operational Creditors and other Creditors were received. However, as no Resolution Plan has been received and/ or approved throughout the Resolution Process period, it is pertinent that the Corporate Debtor be Liquidated. The Committee of Creditors members concurred with the views of the Resolution Professional. As a consequence, the RP has preferred this Application U/s. 33 praying for Order of Liquidation of the Corporate Debtor. Resolution Professional has also submitted that the Committee of Creditors had not recommended him to be the Liquidator. The Resolution Professional has also expressed his unwillingness to continue to perform the duties of the Liquidator. This Bench Orders that i) The Process of Liquidation shall commence as per the Chapter III of the Code from date of this Order. ii) The Resolution Professional (Mr. Rajeev Mannadiar) is now to be termed as Liquidator as per the Provisions of S. 34(1) of the Code. iii) The RP shall advertise in Newspaper about the Liquidation of the Debtor as per the provisions of the Code. iv) Copy of this Order shall be forwarded to the Concerned Authority with which the Debtor is registered. v) The Liquidator is at liberty to seek any directions, if need be, from this Bench during the Liquidation Process.

Summary

Issues: Admission of petition under Section 7 of the Insolvency and Bankruptcy Code, appointment of Interim Resolution Professional (IRP), confirmation of IRP as Resolution Professional (RP), non-cooperation of debtor, committee of creditors meetings, valuation of assets, extension of CIRP period, loans and advances during CIRP, application for liquidation, valuation reports, recommendation for liquidation, claims received from creditors, appointment of liquidator.

Admission of Petition and Appointment of IRP: The petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by the Financial Creditor was admitted, and Mr. Rajeev Mannadiar was appointed as the Interim Resolution Professional (IRP) for the Outstanding Amount of ?1,21,17,752/- related to Inventory Funding Facility.

Confirmation of RP and Debtor Cooperation: The IRP appointed by the Bench was confirmed as the Resolution Professional (RP) by the Committee of Creditors (CoC) in the first meeting. Despite non-cooperation from the Promoter/Director, un-audited financial statements for the relevant years were obtained.

Committee of Creditors Meetings and Valuation of Assets: Multiple Committee of Creditors meetings were held to discuss auditing of financial statements, valuation of assets, and extension of the Corporate Insolvency Resolution Process (CIRP) period. The RP informed about summons received from the High Court and decisions made regarding asset valuation and inviting Expression of Interest for the Company.

Liquidation Process: As no Resolution Plan was proposed or approved, the RP proposed liquidation of the Corporate Debtor, which was agreed upon by the Committee of Creditors. Claims were received from various creditors during the Resolution Process, leading to the RP filing an application for liquidation.

Appointment of Liquidator: The Committee of Creditors did not recommend the RP to be the Liquidator, and the RP expressed unwillingness to continue in that role. Consequently, the Bench ordered the commencement of the liquidation process, renaming the RP as the "Liquidator" as per the provisions of the Code, and instructed the Liquidator to advertise the liquidation in newspapers and seek directions if necessary during the process.