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2021 (10) TMI 1179 - Tri - Insolvency and BankruptcySeeking initiation of liquidation proceedings against the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case, the Application under Section 9 of the Code was admitted on 30.01.2020 and the period of 180 days was ending on 28.07.2020. It is noted that the CoC resolved to liquidate the Corporate Debtor on 04.08.2020 and as a consequence thereof, the instant application is filed by the RP on 21.08.2020. As per Notification No. IBBI/2020-21/GN/REG059 dated 20.04.2020, the period of lockdown is excluded for the purpose of calculating the timelines in CIR Process. Hence, after considering exclusion of lockdown period till 30.06.2020, the present application is filed within the prescribed period. In view thereof the Application under consideration is taken up under Section 33(2) of the Code. Assessment of Sale as a going concern - Regulation 39C of CIRP Regulations, 2016 - HELD THAT - The RP apprised the CoC in its 4th meeting about Regulation 39C of CIRP Regulations, 2016. The members of CoC discussed and resolved to sell the Corporate Debtor as a going concern, as first option, or sell the business(s) of the Corporate Debtor as a going concern, as second option, before exploring other options as per Regulation 32 32A of IBBI (Liquidation Process) Regulations, 2016 and Regulation 39C of CIRP Regulations, 2016, if an order of liquidation is passed by the Adjudicating Authority. In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor, M/s. Kishori Lal Sudesh Kumar Metals Private Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code - Application allowed.
Issues Involved:
1. Initiation of Liquidation Proceedings 2. Compliance with Procedural Timelines 3. Appointment and Fees of Liquidator 4. Liquidation Cost and Sale as a Going Concern 5. Directions for Liquidation Process Issue-wise Detailed Analysis: 1. Initiation of Liquidation Proceedings: The application IA No. 228/JPR/2020 was filed by the Resolution Professional (RP) for M/s. Kishorilal Sudesh Kumar Metals Private Limited under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC) for initiating liquidation proceedings. The Adjudicating Authority had previously admitted the application under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) and appointed Mr. Hansraj Mutreja as the Interim Resolution Professional (IRP). 2. Compliance with Procedural Timelines: The IRP constituted the Committee of Creditors (CoC), which resolved to appoint the IRP as the RP. During the 3rd CoC meeting, it was decided to liquidate the Corporate Debtor due to its non-operational status for over 19 years and lack of assets. The application for liquidation was filed on 21.08.2020, considering the exclusion of the lockdown period due to COVID-19 as per the National Company Law Appellate Tribunal (NCLAT) and Insolvency and Bankruptcy Board of India (IBBI) notifications. 3. Appointment and Fees of Liquidator: Section 34(1) of the Code mandates that the RP shall act as the Liquidator upon submission of written consent unless replaced. The CoC resolved to appoint Mr. Hansraj Mutreja as the Liquidator, who met the eligibility criteria and had submitted his consent. The Liquidator's consolidated fees were fixed at ?2,00,000/- plus actual expenses. 4. Liquidation Cost and Sale as a Going Concern: Regulation 39B of CIRP Regulations, 2016 was discussed, and the liquidation cost was estimated at ?6,00,000/-. The CoC approved this with 69.69% voting rights. Regulation 39C was also considered, and the CoC resolved to sell the Corporate Debtor as a going concern as the first option, or its business as a going concern as the second option, before exploring other sale options. 5. Directions for Liquidation Process: The Tribunal directed the liquidation of M/s. Kishori Lal Sudesh Kumar Metals Private Limited under Chapter III of the Code. Key directions included: - No suit or legal proceedings shall be instituted by or against the Corporate Debtor without prior approval. - The liquidation order serves as a notice of discharge to officers, employees, and workmen, except when the business continues during liquidation. - All powers of the Board of Directors and key personnel cease and vest in the Liquidator. - The personnel of the Corporate Debtor must cooperate with the Liquidator. - The Liquidator must publish a public announcement within five days and file a preliminary report within 75 days, followed by regular progress reports. Conclusion: The application IA No. 228/JPR/2020 was disposed of, and the order for liquidation was issued with specific directions to ensure compliance with the IBC and related regulations. The Registry was instructed to send a copy of the order to the Liquidator and the Registrar of Companies.
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