2020 (2) TMI 1123 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor Company - HELD THAT - It is now settled position in law as per the decision of the Hon ble Supreme Court of India in the matter of K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT and in ESSAR STEEL LTD. VERSUS UNION OF INDIA ORS. 2016 (4) TMI 1366 - SUPREME COURT that the commercial wisdom applied by Member of the CoC to be treated as conclusive and this Adjudicating Authority is not expected to sit in appeal and to substitute its own view to the CoC. Because its jurisdiction is supervisory in nature and nor as of an Appellant Authority. The present application can be allowed in view of the resolution of the CoC for passing an appropriate order for liquidation of the company - Application deserves to be allowed and an order for liquidation of the company is required to be passed. It is ordered that the Corporate Debtor Company M/s. Shri Padmavati Sortex Pvt. Ltd. shall go under liquidation with certain directions.

Summary

Issues:
- Application for liquidation under Sections 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code
- Resolution of Committee of Creditors (CoC) for liquidation
- Appointment of Resolution Professional (RP) as Liquidator
- Legal proceedings and powers of the Liquidator

Analysis:

1. Application for Liquidation: The Applicant RP filed an Interlocutory Application seeking liquidation of the Corporate Debtor Company, Shri Padmavati Sortex Pvt. Ltd., under Sections 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code. The CoC, in its 5th meeting, unanimously resolved for liquidation due to the absence of any proposal for Expression Of Interest (EOI) from potential resolution applicants despite publication. The CoC decided against seeking an extension of the Corporate Insolvency Resolution Process (CIRP) and recommended liquidation, leading the Applicant RP to proceed with the liquidation process.

2. Resolution of Committee of Creditors: The CoC, in the same meeting, recommended the present Resolution Professional, Mr. Vinodkumar Surendralal Shah, to continue as the Liquidator for the Corporate Debtor Company. The suspended management expressed no objection to the liquidation, and the Adjudicating Authority highlighted the legal precedence that the commercial wisdom applied by the CoC is conclusive, and the Authority's role is supervisory, not appellate.

3. Appointment of Resolution Professional as Liquidator: The Tribunal allowed the application for liquidation based on the CoC's resolution, appointing Mr. Vinodkumar Surendralal Shah as the Liquidator. The order specified the cessation of moratorium, discharge notice to officers and employees, restrictions on legal proceedings, and the powers and duties of the Liquidator as per the Insolvency and Bankruptcy Code.

4. Legal Proceedings and Powers of the Liquidator: The order detailed various directions for the liquidation process, including the extension of assistance and cooperation to the Liquidator by the personnel of the Corporate Debtor, transfer of powers from Directors to the Liquidator, fee payment mechanisms, and compliance with the provisions of the Insolvency and Bankruptcy Code for conducting the liquidation proceedings.

In conclusion, the Tribunal allowed the application for liquidation, appointed the Resolution Professional as the Liquidator, and issued detailed directions and observations for the liquidation process in accordance with the Insolvency and Bankruptcy Code.