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2021 (11) TMI 192 - Tri - Insolvency and BankruptcyLiquidation of Corporate Debtor - Section 33(1) of the Insolvency Bankruptcy Code, 2016 - HELD THAT - Despite all possible steps as required under the Code taken during the CIRP, the Applicant failed to receive any resolution plan. This Authority has no reason before it to take a contrary view in terms of Section 33(1)(a) of the Code. Therefore, there are no option than to pass an order of liquidation of the Company in the manner laid down in Chapter-III of the Code. This Adjudicating Authority is of the view that the efforts to obtain resolution of the Corporate Debtor has failed and as per the directions of this Tribunal, decided to liquidate the Corporate Debtor - application allowed.
Issues Involved:
- Application for liquidation under Section 33(1) of the Insolvency & Bankruptcy Code, 2016 - Failure to receive any resolution plan during Corporate Insolvency Resolution Process (CIRP) - Non-cooperation of Committee of Creditors (CoC) - Appointment of a Liquidator - Compliance with legal provisions for liquidation process Issue 1: Application for liquidation under Section 33(1) of the Insolvency & Bankruptcy Code, 2016: The Tribunal received an application from the Resolution Professional seeking orders for the liquidation of the Corporate Debtor, M/s. Pro Young International Private Limited, under Section 33(1) of the Code. The Resolution Professional highlighted that despite conducting multiple CoC meetings, there was no cooperation from the Operational Creditors, and no resolution was passed regarding the CIRP costs. The Adjudicating Authority directed the Resolution Professional to file an application for liquidation as the CIRP process had extended over 500 days. Issue 2: Failure to receive any resolution plan during Corporate Insolvency Resolution Process (CIRP): The Resolution Professional expressed his inability to receive any resolution plan during the CIRP despite efforts made. The Tribunal, in line with the provisions of the Code, decided that the Corporate Debtor's resolution was unattainable, leading to the decision to proceed with liquidation as per Chapter-III of the Code. Issue 3: Non-cooperation of Committee of Creditors (CoC): The CoC, comprising Operational Creditors and stakeholders, was reported to be non-cooperative with the Resolution Professional. The Tribunal observed that the CIRP had exceeded the permissible 330-day period, compelling the Adjudicating Authority to order the liquidation of the Corporate Debtor without waiting for CoC's permission. The Resolution Professional was directed to move the liquidation application promptly. Issue 4: Appointment of a Liquidator: The Resolution Professional expressed unwillingness to act as the Liquidator and requested the Tribunal to appoint one. Consequently, the Tribunal appointed Mr. P.V. Narayana Rao, an Insolvency Professional, as the Liquidator from the panel of professionals received from IBBI. The Liquidator was directed to undertake specific responsibilities and comply with the Code's provisions and regulations during the liquidation process. Issue 5: Compliance with legal provisions for liquidation process: The Tribunal, following the decision to liquidate the Corporate Debtor, issued comprehensive directions regarding the liquidation process. These included the appointment of the Liquidator, cessation of the moratorium, transfer of powers from the Board of Directors to the Liquidator, and the requirement for cooperation from personnel connected with the Corporate Debtor. The order also specified the entitlement of the Liquidator to fees as per the Code's provisions. In conclusion, the Tribunal partially allowed the application for liquidation, appointed a Liquidator, and issued detailed directions for the liquidation process in accordance with the provisions of the Insolvency & Bankruptcy Code, 2016.
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