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2020 (4) TMI 675 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - sections 33(1), 33(2) and 34(1) of the IB Code, 2016 - HELD THAT - RP in response to calling of Expression of Interest from the potential resolution applicants, received only one expression from M/s. GSEC Ltd. and the same was not to the expectation of the CoC and therefore, CoC rejected the resolution plan. However, before rejecting the resolution plan submitted by M/s. GSEC Ltd., sufficient opportunities were provided to M/s. GSEC Ltd. to present their case - It is further observed by this Adjudicating Authority that had the resolution applicant i.e. M/s. GSEC Ltd. any grievances against the CoC, the resolution applicant would have preferred IA against the decision of the CoC. Whereas in the instant case, the IA is preferred by the suspended board of director of the Corporate Debtor Company. Further, this Adjudicating Authority cannot question the wisdom of the CoC and their recommendation for liquidation of the Corporate Debtor Company. This Adjudicating Authority is of a considered view that there shall be an order of liquidation in respect of the Corporate Debtor Company Ardor Global Private Limited and direct the Liquidator to issue a public announcement stating that Corporate Debtor Company is in liquidation - Application allowed.
Issues:
1. Appointment of Resolution Professional 2. Consideration of Resolution Plans by Committee of Creditors 3. Liquidation of Corporate Debtor Company 4. Interlocutory Application for Reconsideration of Resolution Plan Appointment of Resolution Professional: The case involved the appointment of an Interim Resolution Professional (IRP) for a Corporate Debtor Company under the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the application and directed the IRP to initiate the Corporate Insolvency Process. Subsequently, there were disputes regarding the proposed Resolution Professional by the Committee of Creditors (CoC). The Authority declined the recommendation of a proposed Resolution Professional due to violations of prescribed provisions of the IB Code. Eventually, a new Resolution Professional was proposed and an application was filed for his confirmation. Consideration of Resolution Plans by Committee of Creditors: The Resolution Professional discussed potential Resolution Applicants with the CoC, and after rejection of certain plans, the CoC recommended the Corporate Debtor Company for liquidation. However, there was ambiguity regarding the continuation of the Resolution Professional as the Liquidator. Various resolution plans were considered and rejected, leading to the decision for liquidation of the Company. An Interlocutory Application was filed by a suspended board director seeking reconsideration of the resolution plans, which was contested. Liquidation of Corporate Debtor Company: The CoC recommended the liquidation of the Corporate Debtor Company after the rejection of resolution plans. The Adjudicating Authority extended the Corporate Insolvency Resolution Process (CIRP) duration by 90 days, but eventually, the CIRP expired, leading to the decision for liquidation. The Authority ordered the liquidation of the Company and appointed the Resolution Professional as the Liquidator, directing the issuance of a public announcement regarding the liquidation. Interlocutory Application for Reconsideration of Resolution Plan: An Interlocutory Application was filed by a suspended board director seeking reconsideration of the rejected resolution plans. The Authority found that the applicant had no locus standi to make the application, as the commercial aspects of resolution plans fall under the expertise of the CoC. The Authority cited legal precedents emphasizing the supremacy of the CoC's commercial wisdom and the limitations on questioning their decisions. The application for reconsideration of resolution plans was deemed contingent and not maintainable due to the expiration of the CIRP timeline. In conclusion, the Adjudicating Authority allowed the liquidation of the Corporate Debtor Company, appointed the Resolution Professional as the Liquidator, and disposed of all pending applications in view of the liquidation order.
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