2021 (4) TMI 12 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - resolution plan not submitted as required - HELD THAT - It is noted that in response to the EOI, no resolution plan has been received from any quarters. Therefore, the CoC in its 5th meeting resolved in favour of liquidation of the Corporate Debtor. In view of the unanimous decision of the CoC, we have no other option than to admit MA 4008 of 2019 and initiate Liquidation process of the Corporate Debtor. In the 5th CoC meeting, CoC members having 27.68% of voting share has assented for appointment of RP as Liquidator but CoC members having voting share of 72.34% dissented for appointment of RP as Liquidator. Since the majority of the CoC Members had voted against Applicant s appointment as liquidator. From the subsequent material submitted it is observed that Mr. Rajeev Muppidi from Axis Bank Limited vide its email dated January 15, 2020, has consented on behalf of the bank for the appointment of RP as Liquidator. The application is allowed to initiate liquidation process against the Corporate Debtor.

Summary

Issues: Liquidation of Corporate Debtor, Appointment of Liquidator

Liquidation Process Initiation:
The Application under Section 33 of the Insolvency and Bankruptcy Code, 2016 sought the liquidation of the Corporate Debtor, which was approved unanimously by the Committee of Creditors in a meeting. The CoC meetings during the Corporate Insolvency Resolution Process (CIRP) discussed various aspects, including the appointment of Resolution Professional (RP) and valuation of assets. Despite efforts to invite expressions of interest for the revival of the company, no resolution plan was received, leading to the CoC's decision to proceed with liquidation.

Appointment of Liquidator:
The CoC members were divided regarding the appointment of the Liquidator, with a majority favoring the RP as Liquidator. However, a dissenting group with a significant voting share opposed this appointment. The Tribunal noted the lack of resolution plans and the CoC's decision for liquidation. It directed the initiation of the liquidation process against the Corporate Debtor and appointed a Liquidator from the panel provided by the Insolvency and Bankruptcy Board of India. The Liquidator was tasked with taking over the assets, managing the liquidation process, issuing public notices, and representing the Corporate Debtor before authorities.

Judgment and Directives:
The Tribunal allowed the Application to initiate the liquidation process, appointed a specific Liquidator, and instructed the RP to hand over possession of assets to the Liquidator. The Liquidator was mandated to follow the Code and Regulations for the liquidation process. Public notices were to be issued, and the moratorium declared under Section 14 of the I&B Code was to cease. The powers of the Board of Directors and key managerial personnel were transferred to the Liquidator, who was authorized to manage the liquidation process and represent the Corporate Debtor before government authorities. The judgment also included directives for legal proceedings, discharge of officers and employees, and communication to relevant parties and authorities.

This comprehensive analysis outlines the key issues addressed in the judgment, focusing on the liquidation process initiation, appointment of the Liquidator, and the directives provided by the Tribunal for the management of the Corporate Debtor's liquidation process.