2021 (8) TMI 163 - AT - Insolvency and Bankruptcy

Approval of Resolution Plan - liquidation not required when all requirements of Resolution fulfilled - HELD THAT - Keeping in view the main objective of Insolvency and Bankruptcy Code that all efforts should be made for resolution of the Corporate Debtor in the present matter when we have a Resolution Plan approved by the CoC, we do not think that orders of liquidation should be passed without considering the Resolution Plan already approved by the CoC. There are no reason to admit the Appeal in the facts of the matter. Although the CoC did not strictly follow the time frame given by the Adjudicating Authority and displeasure was expressed, when Adjudicating Authority exercised discretion not to pass order of liquidation and wait, we will not interfere in the discretion. When the Resolution Plan is on the verge of being accepted or rejected by the CoC it would not make much difference if little time is extended. The appeal is not required to be interfered with the impugned order - Adjudicating Authority may consider the Resolution Plan as has been placed before it in terms of provisions of law on its own merits - appeal disposed off.

Summary

Issues:
1. Application for injunction against actions related to resolution plan.
2. Alleged violation of time frame by Committee of Creditors.
3. Request for liquidation order under Section 33 of the Insolvency and Bankruptcy Code, 2016.
4. Discretion of Adjudicating Authority in passing liquidation order.

Analysis:
1. The appeal was filed against the rejection of an application seeking injunctions against actions related to a resolution plan by the Appellant, a financial corporation. The application requested restraining orders regarding the resolution plan and liquidation of the Corporate Debtor, citing violations and concerns about the process.

2. The key issue revolved around the alleged violation of the timeline set by the Adjudicating Authority by the Committee of Creditors (CoC). The CoC extended the decision-making process beyond the specified date, prompting disapproval from the Adjudicating Authority for not adhering to the timelines and unilaterally extending the decision period without seeking proper approvals.

3. The Appellant argued for a liquidation order under Section 33 of the Insolvency and Bankruptcy Code, 2016, due to the perceived delays and non-compliance with the prescribed procedures. The Adjudicating Authority expressed displeasure with the actions of the Resolution Professional and the CoC but refrained from passing a liquidation order at that stage.

4. The Adjudicating Authority exercised discretion in not immediately passing a liquidation order despite the non-compliance and expressed displeasure with the handling of the resolution process. The Authority emphasized the importance of maximizing the value of the Corporate Debtor within the specified timeframe and directed for the expeditious conclusion of the resolution process, declining to interfere with the resolution plan already approved by the CoC.

In conclusion, the appeal was declined as the Adjudicating Authority chose not to pass a liquidation order at that stage, considering the Resolution Plan approved by the CoC. The Authority stressed the importance of resolution efforts and discretion exercised in the context of the Insolvency and Bankruptcy Code objectives, emphasizing the need to conclude the process efficiently and effectively.