2020 (9) TMI 989 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33(1) of the Insolvency Bankruptcy Code, 2016 - Resolution Professional has filed the present application for resolution as statutory period has elapsed from the date of initiation of CIRP and no Resolution Plan has been approved by the CoC - HELD THAT - It is pertinent to refer Section 33(1)(a) of the IBC, which mandates that where the Adjudicating Authority before the expiry of maximum period permitted for completion of the corporate insolvency resolution process under Section 12 or the fast track corporate insolvency resolution process under Section 56, as the case may be, does not receive a resolution plan under sub-section (6) of Section 30, it shall pass an order requiring the Corporate Debtor to be liquidated in the manner as laid down in the manner. Therefore, the Tribunal observes that upon failure of the resolution process and no approved resolution plan and further on completion of statutory CIRP process, there is no alternative left but to order in conformity with the decision of the CoC liquidation has to follow under Section 33 of the Code. Adherence of the statutory requirement has to be done, as the language of the Code is clear that the adjudicating authority must give effect to it whatever may be consequences. Thus, the application is allowed by ordering liquidation of Corporate Debtor i.e. JVL Agro Industries Ltd. in the manner laid down in Chapter III Part II of IBC, 2016 and further appoint Supriyo Kumar Chaudhari as a liquidator in terms of Section 34(1) of the Code, and he is directed to issue public announcement stating that the Corporate Debtor is in liquidation, in terms of Regulation 12 of IBBI (Liquidation Process) Regulations, 2016 - Application allowed.

Summary

Issues Involved:
1. Liquidation of the Corporate Debtor under Section 33(1) of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Consideration of resolution plans submitted after the completion of the Corporate Insolvency Resolution Process (CIRP) period.
3. Disqualification of applicants under Section 29A of the IBC.

Issue-wise Detailed Analysis:

1. Liquidation of the Corporate Debtor under Section 33(1) of the IBC, 2016:
The Resolution Professional (RP) filed an application for the liquidation of the Corporate Debtor, JVL Agro Industries Ltd., under Section 33(1) of the IBC, 2016. The Tribunal had previously admitted the petition for initiation of CIRP against the Corporate Debtor and appointed Mr. Abhishek Gupta as the Interim Resolution Professional (IRP), later replaced by Mr. Supriyo Kumar Chaudhary as the RP. Despite multiple extensions and invitations for Expressions of Interest (EOI), no viable resolution plans were received by the RP. Consequently, the Committee of Creditors (CoC) rejected the only submitted resolution plan by SREI Multiple Assets Investment Trust Vision India Fund with a 98.18% voting share. With no approved resolution plan and the statutory CIRP period elapsed, the RP sought liquidation of the Corporate Debtor.

2. Consideration of resolution plans submitted after the completion of the CIRP period:
Applications were filed by Mr. Ramesh Chandra Garg and others (CA No. 73/2020) and Equilibrated Venture CFlow Private Limited (IA No. 160/2020) seeking to submit resolution plans after the completion of the CIRP period. The Tribunal emphasized that these applications were filed directly to the Adjudicating Authority without participating in the EOI process or submitting plans within the specified timeline. The Tribunal referred to the Supreme Court's judgment in Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta & Others, which clarified that no resolution plan could be considered after the expiry of the CIRP period. The Tribunal found no merit in these applications and rejected them, reiterating that allowing such late submissions would make the CIRP an unending process.

3. Disqualification of applicants under Section 29A of the IBC:
The Tribunal noted that Mr. R.C. Garg, one of the applicants in CA No. 73/2020, was disqualified under Section 29A of the IBC as he was part of the suspended management of the Corporate Debtor when it defaulted. The Tribunal highlighted that the trust proposed by the applicants was not in existence and lacked the locus to file any resolution plan at this stage. Consequently, the Tribunal rejected the application, emphasizing the statutory disqualification under Section 29A.

Conclusion:
The Tribunal ordered the liquidation of the Corporate Debtor, JVL Agro Industries Ltd., under Section 33(1) of the IBC, 2016, and appointed Supriyo Kumar Chaudhary as the liquidator. The Tribunal directed the liquidator to proceed with the liquidation process in accordance with the Code and Regulations, and to file progress reports every three months. The order of moratorium under Section 14 of the IBC ceased, and a fresh moratorium under Section 33(5) commenced. The Tribunal also directed the registry to communicate the order to the Registrar of Companies (ROC) Kanpur and the Insolvency and Bankruptcy Board of India (IBBI).