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2020 (10) TMI 264 - Tri - Insolvency and BankruptcyLiquidation of the Corporate Debtor - section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is found that five claims have been received and admitted, and there are neither any fixed assets nor any business with the Corporate Debtor. Therefore, the CoC has resolved for liquidation of the Corporate Debtor vide its 4th meeting dated 07.12.2019. It is also to be noted that this Adjudicating Authority has no jurisdiction to interfere in the commercial wisdom of the CoC. The Adjudicating Authority passes an order for initiation of liquidation of the Corporate Debtor viz., Special Prints Limited. - Application admitted - moratorium declared.
Issues:
Liquidation of Corporate Debtor under section 33(2) of the Insolvency and Bankruptcy Code, 2016. Analysis: The judgment pertains to an application filed by the Resolution Professional (RP) of the Corporate Debtor seeking liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 (IB Code) and the appointment of a Liquidator. The case originated from a Company Petition filed by an Operational Creditor against the Corporate Debtor, which led to the initiation of the Corporate Insolvency Resolution Process (CIRP) and the appointment of an Interim Resolution Professional (IRP). The Committee of Creditors (CoC) decided for the continuation of the IRP as RP after receiving and admitting five claims. However, due to the absence of fixed assets or business, the CoC resolved to pursue liquidation, leading to the application under section 33(2) of the IB Code. The Adjudicating Authority noted the absence of fixed assets or business with the Corporate Debtor, leading to the CoC's decision for liquidation. The Authority emphasized that it does not have jurisdiction to interfere in the commercial wisdom of the CoC, citing previous judgments that affirmed the CoC's discretion in maximizing asset value and determining creditor payments. Consequently, the Adjudicating Authority ordered the following: - The moratorium under Section 14 of the IB Code ceases upon liquidation. - The Liquidator must issue a public announcement regarding the Corporate Debtor's liquidation. - Legal proceedings against the Corporate Debtor are prohibited, except those initiated by the Liquidator with prior approval. - Certain legal proceedings exempted by the Central Government are not subject to the prohibition. - Powers of the Corporate Debtor's management are transferred to the Company Liquidator. - The Liquidator is entitled to charge fees for conducting the liquidation proceedings. - The Registry is directed to communicate the order to relevant entities for compliance. Ultimately, the application for liquidation was allowed, and the RP was appointed as the Liquidator for the Corporate Debtor. The judgment concluded with the disposal of the application based on the circumstances and observations outlined in the order.
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