2022 (2) TMI 12 - Tri - Insolvency and Bankruptcy

Seeking Liquidation of Corporate Debtor - Section 33(2) read with 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since no resolution plan has come before this Adjudicating Authority for approval and CoC has passed resolution approving the liquidation of corporate debtor, therefore, the Corporate Debtor has to be ordered for Liquidation. T his Authority hereby orders for liquidation of the Corporate Debtor (CD) viz., M/s. Narmada Cereals Pvt. Ltd. which shall be conducted in the manner as laid down in Chapter III of part II of the Insolvency Bankruptcy Code, 2016 - Application allowed

Issues:
Liquidation order for Corporate Debtor - Narmada Cereals Pvt. Ltd.

Analysis:
1. Background and Initiation of CIRP:
The judgment pertains to IA-3796/2021 filed in CP (IB) -138/ND/2020 by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated on 07.12.2020, with Dr. Vichitra Narayan Pathak appointed as the Resolution Professional.

2. Resolution Plan Submissions and CoC Meetings:
After the constitution of the Committee of Creditors (CoC), various meetings were held to invite expression of interest, evaluate resolution plans, and seek revisions from Prospective Resolution Applicants (PRAs). Despite extensions and opportunities provided by the CoC, the resolution plans submitted were not deemed feasible or satisfactory.

3. Rejection of Resolution Plans and Approval of Liquidation:
On 09.08.2021, with 100% voting share, the CoC voted against all resolution plans, opting for the liquidation of the Corporate Debtor. Despite subsequent submissions and considerations of revised plans, the CoC ultimately rejected all resolution plans, leading to the decision for liquidation.

4. Order for Liquidation and Appointment of Liquidator:
In light of the CoC's decision and the absence of an approved resolution plan, the Adjudicating Authority proceeded to pass a Liquidation Order for Narmada Cereals Pvt. Ltd. The Resolution Professional was not appointed as the Liquidator, and Mr. Prabhat Jain was appointed from the IBBI-recommended list to oversee the liquidation process.

5. Legal Proceedings and Liquidation Process:
The judgment outlined restrictions on legal proceedings against the Corporate Debtor, granting the Liquidator the authority to initiate legal actions on behalf of the Corporate Debtor with prior approval. The cessation of powers of the Board of Directors and the transfer of authority to the Liquidator were also specified, along with directives for cooperation from the Corporate Debtor's personnel.

6. Compliance and Communication:
The judgment directed the Registry to communicate the order to relevant authorities promptly, including the Registrar of Companies and the Liquidator. Additionally, provisions were made for the Liquidator's fee structure and entitlements during the liquidation proceedings.

In conclusion, the judgment detailed the progression from the initiation of CIRP to the rejection of resolution plans and the subsequent order for liquidation of Narmada Cereals Pvt. Ltd. It established the legal framework for the liquidation process, including the appointment of the Liquidator and the transfer of powers, ensuring compliance and cooperation during the liquidation proceedings.

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