2021 (12) TMI 1151 - Tri - Insolvency and Bankruptcy

Seeking liquidation of the Corporate Debtor - section 33(1) of the Insolvency Bankruptcy Code, 2016 - HELD THAT - RP has filed an application under section 33(1) of the Code, before the Adjudicating Authority for liquidation of the Corporate Debtor and appointment of RP as liquidator who has given his consent to act as liquidator which is placed in the present application. He is stated to have a valid authorization for assignment. The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - Application allowed.

Summary

Issues:
Liquidation of Corporate Debtor

Analysis:
The judgment pertains to an application filed by the Resolution Professional (RP) upon the instructions of the Committee of Creditors (CoC) seeking the liquidation of the Corporate Debtor, Leel Electricals Limited. The application sought various reliefs, including the appointment of the RP as the liquidator. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on a petition filed by an Operational Creditor. The RP invited expressions of interest from prospective applicants, and multiple EoIs were received, but no resolution plan was approved. The CIRP period was extended multiple times by the Adjudicating Authority.

In subsequent CoC meetings, resolution plans were discussed and rejected, leading to the decision to re-publish the invitation for EoIs. Despite these efforts, no viable resolution plan was accepted by the CoC. As the CIRP period was nearing expiration, the RP filed an application under section 33(1) of the Insolvency and Bankruptcy Code for the liquidation of the Corporate Debtor. The Adjudicating Authority allowed the application, ordering the liquidation of the Corporate Debtor and appointing the RP as the liquidator.

The judgment outlined various directions, including the issuance of a public notice regarding the liquidation, the cessation of powers of the Board of Directors, the commencement of a fresh moratorium, and the payment of fees to the liquidator as per the prescribed regulations. The judgment also emphasized the cooperation required from the Corporate Debtor's personnel during the liquidation process. Additionally, the liquidator was directed to submit reports and filings as per the regulatory requirements within specified timelines.

Overall, the judgment detailed the process leading to the decision for liquidation, the responsibilities and powers vested in the liquidator, and the procedural steps to be followed during the liquidation process in accordance with the relevant provisions of the Insolvency and Bankruptcy Code.