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2020 (9) TMI 896 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - appointment of the Liquidator - section 33(1), 33(2) 34(l) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is found that no response was received from any person or proposed Resolution Applicant and also, there is no ongoing business of the Corporate Debtor. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its Fourth meeting dated 15.06.2020. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC. Application is allowed and the Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Shree Santosh Cotton Spin Private Limited. The RP i.e. Mr. Bhupendra Singh Narayan Singh Rajput, shall act as the Liquidator for the purpose of liquidation of the Corporate Debtor.
Issues: Liquidation of Corporate Debtor under Insolvency and Bankruptcy Code, 2016
Issue 1: Application for Liquidation and Appointment of Liquidator The Resolution Professional (RP) filed IA No. 350 of 2020 seeking liquidation of the Corporate Debtor under sections 33(1), 33(2), and 34(1) of the Insolvency and Bankruptcy Code, 2016 (IB Code) and the appointment of a Liquidator. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and the Committee of Creditors (CoC) decided for the continuation of the Interim Resolution Professional (IRP) as the RP. Subsequently, the CoC unanimously decided for the liquidation of the Corporate Debtor due to the absence of responses from any party or proposed Resolution Applicant and the lack of ongoing business. Issue 2: Jurisdiction and Commercial Wisdom of CoC The Adjudicating Authority observed that it does not have the jurisdiction to interfere in the commercial wisdom of the CoC, citing previous judgments. The Supreme Court's ruling emphasized that the commercial wisdom of the CoC cannot be questioned by the Adjudicating Authority, and the discretion of payment to creditors lies with the CoC. The CoC's decision for liquidation was based on maximizing the asset value of the Corporate Debtor, and the Authority supported the CoC's decision in this regard. Issue 3: Orders for Liquidation Process The Tribunal passed several orders related to the liquidation process, including the cessation of moratorium, issuance of public announcement, communication with the authority where the Corporate Debtor is registered, restrictions on legal proceedings, transfer of powers to the Liquidator, cooperation of Corporate Debtor personnel with the Liquidator, fee entitlement of the Liquidator, and communication of the order to relevant entities. The RP was appointed as the Liquidator for the purpose of liquidating the Corporate Debtor. Conclusion The Tribunal allowed the application for liquidation under the IB Code, initiating the liquidation process for the Corporate Debtor. The RP was designated as the Liquidator, and the orders regarding the liquidation process were detailed to ensure compliance and smooth transition to the liquidation phase. The application was allowed, and the matter was disposed of accordingly.
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