2020 (9) TMI 995 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the factual background and in the absence of any approved resolution plan and for want of time beyond statutory CIRP period; there is no other alternative left but to order in conformity with the decision of the Committee of Creditors, for liquidation of the corporate debtor under Section 33 of the Code. The application is allowed by ordering liquidation of the corporate debtor, namely M/s. Beta Infratech Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016.

Summary

Issues:
1. Application for liquidation of the Corporate Debtor under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016.
2. Failure to receive any approved resolution plan within the statutory period.
3. Decision-making process of the Committee of Creditors (CoC) regarding liquidation versus resolution plan approval.

Analysis:
1. The Resolution Professional filed an application for liquidation of the Corporate Debtor, M/s. Beta Infratech Private Limited, under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the same.
2. Despite efforts to invite and evaluate Expression of Interests (EOIs) for the resolution plan, no viable plan was received within the stipulated time frame, leading to multiple extensions granted by the CoC.
3. The CoC, after several meetings and extensions, decided to move towards liquidation due to the absence of any approved resolution plan, following statutory requirements and the clear language of the Code mandating liquidation in such cases.
4. The CoC deliberated on the sale of the Corporate Debtor as a going concern and other options under the Companies Act, 2013, before ultimately deciding on liquidation.
5. The ex-management of the Corporate Debtor objected to the decision, arguing that the resolution plan offered more than the liquidation value. However, the CoC's decision was based on the lack of an approved resolution plan despite the statutory period elapsing.
6. The Tribunal upheld the CoC's decision, emphasizing that the Adjudicating Authority must follow the Code's provisions strictly, leading to the order for liquidation of the Corporate Debtor.
7. Detailed directions were provided for the liquidation process, including the appointment of a Liquidator, issuance of Public Announcement, communication with relevant authorities, commencement of a fresh Moratorium, investigation of financial affairs, and submission of reports within specified timelines.
8. The Tribunal disposed of the application in favor of ordering the liquidation of the Corporate Debtor, emphasizing adherence to statutory requirements and the decision of the CoC in the absence of an approved resolution plan.

This comprehensive analysis highlights the key issues, decision-making process, and legal aspects involved in the Tribunal's judgment regarding the liquidation of the Corporate Debtor.