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2022 (1) TMI 721 - AT - Insolvency and BankruptcyAppointment of the Liquidator or restraining the Liquidator from discharging the employees etc. - Section 61 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The CoC agreed to accept the EOI of SREI and further extended the date of submission of the Resolution Plan from 02.03.2019 to 25.03.2019. However, SREI submitted the Resolution Plan on 16.04.2019 which was rejected by the CoC on 07.05.2019 by approx.98% vote. SREI went on improving the proposal just by a minuscule amounts and finally CoC decided to put the resolution plan to vote on 24.07.2019. However, the Resolution Plan was rejected by the CoC by approx.71% of the vote and rejection was communicated to the SREI. On 25.07.2019, SREI further sent a standalone financial offer raising its proposal from ₹ 395 Crore to ₹ 401 Crore - The issue was why we are going on endlessly with the same firm as IBC is a time bound programme. No other members informed RP of any of its comments. Similarly, the RP received proposal from employee trust which are unregistered on the date of application and he could not verify the sources of funding authenticity etc. It is observed that the RP has forwarded the proposal of employee trust to the members of the CoC as directed by the Adjudicating Authority. No response was received from any members of the CoC - IBBI (Liquidation Process) Regulations 2016 vide Chapter VI Regulation 32 provides the sale of the CD as a going concern. Regulation 33 of the same Regulation also provides the methodology to sale. All this provides going concern sale. It is very much clear there is no viable plan for the consideration of the CoC and CIRP period has expired long back - All this suggests for that the Adjudicating Authority has no options but to pass order of Liquidation on completion of Insolvency Period and accordingly, the Adjudicating Authority has passed the liquidation order. There are no infirmity in the impugned order to set it aside. However, the RP is directed to make all attempts to sale the CD as a going concern or the business of the CD as a going concern in consultation with stakeholders consultations committee as constituted under Regulation 31A of the IBBI (Liquidation Process) Regulations 2016, in order to protect the livelihood of 550 families - application disposed off.
Issues Involved:
1. Validity of the liquidation order passed by the Adjudicating Authority. 2. Allegations of bias and misconduct against the Resolution Professional (RP). 3. Consideration of Resolution Plans submitted by various applicants. 4. Jurisdiction and composition of the Adjudicating Authority. Detailed Analysis: 1. Validity of the Liquidation Order: The appeals were filed against the impugned order dated 19.08.2020, which ordered the liquidation of the Corporate Debtor (CD). The Adjudicating Authority observed that the intervention applications were filed after the completion of the Corporate Insolvency Resolution Process (CIRP) period, and thus, it was not empowered to allow the applicant to file the plan after the expiry of such a long period. The Tribunal noted that the statutory CIRP period had elapsed without any approved resolution plan, necessitating the liquidation order under Section 33 of the Insolvency and Bankruptcy Code (IBC). The Tribunal emphasized that adherence to statutory requirements is mandatory, and liquidation follows the failure of the resolution process. 2. Allegations of Bias and Misconduct Against the RP: The Appellant alleged that the RP, a former employee of the State Bank of India (SBI), acted in the bank's interest, pushing for liquidation to benefit SBI. The RP was accused of failing to seek exclusions for litigation periods and not placing revised resolution plans before the Committee of Creditors (CoC). The Respondent countered that the RP acted independently and followed the statutory process, including seeking extensions and placing resolution plans before the CoC. The Tribunal found no evidence of bias or misconduct by the RP. 3. Consideration of Resolution Plans Submitted by Various Applicants: The Appellant argued that viable resolution plans were not considered, including a plan submitted by the employees offering ?512 Crore against the liquidation value of ?385 Crore. The RP and CoC contended that multiple extensions were granted, and no viable resolution plan was received within the statutory period. The Tribunal noted that the RP forwarded all proposals to the CoC, and no positive response was received. The Tribunal emphasized that the CIRP is a time-bound process, and the statutory period had expired without an approved plan, justifying the liquidation order. 4. Jurisdiction and Composition of the Adjudicating Authority: The Appellant challenged the jurisdiction of the single-member bench of the Adjudicating Authority, citing Section 419(3) of the Companies Act, 2013. The Respondent clarified that the single-member bench was duly constituted by the competent authority, and the Tribunal found no jurisdictional infirmity. The Tribunal referred to the statutory provisions allowing single-member benches and upheld the validity of the order passed by the single-member bench. Conclusion: The Tribunal upheld the liquidation order, directing the RP to attempt the sale of the CD as a going concern to protect the livelihood of 550 employees. The appeals were disposed of with the observation that the RP must consult the stakeholders' consultation committee for the sale process. Pending applications and interim orders were disposed of, with no order as to costs.
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