2022 (2) TMI 961 - Tri - Insolvency and Bankruptcy

Liquidation of the Corporate Debtor - Section 33(2) and 34(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since the CoC in its commercial wisdom has decided to take the Corporate Debtor in liquidation, the decision of CoC should not be interfered. The present application seeking liquidation of the Corporate Debtor M/s. Nizamiya Construction Private Limited, in the manner laid down in Chapter III of Part II of the Code is allowed.

Summary

Issues: Application for liquidation under Sections 33(2) and 34(1) of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Background and Initiation of CIRP:
The application filed by the Resolution Professional (RP) sought an order of liquidation for the Corporate Debtor, M/s. Nizamiya Construction Private Limited, under Sections 33(2) and 34(1) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated based on an application by an Operational Creditor, M/s. Patel Traders, and was admitted, leading to the appointment of an Interim Resolution Professional (IRP).

2. Constitution of Committee of Creditors (CoC) and Meetings:
The IRP conducted the necessary procedures as per the Insolvency and Bankruptcy Board of India Regulations, including making a public announcement and receiving claims from creditors. The CoC was constituted, and subsequent meetings were held to address matters such as valuation, admission of claims, and decision-making regarding the Corporate Debtor's financial situation.

3. Decision for Liquidation:
After thorough assessment and discussions in various CoC meetings, it was determined that the Corporate Debtor lacked significant assets to cover costs and debts. The CoC, in its commercial wisdom, passed a resolution directing the RP to file an application for the Corporate Debtor's dissolution. Following a rejection of the initial dissolution application, the CoC later resolved with 100% voting for liquidation under Section 33(2) of the Code.

4. Order for Liquidation and Appointment of Liquidator:
Considering the CoC's decision and the RP's application, the Tribunal allowed the liquidation of the Corporate Debtor, M/s. Nizamiya Construction Private Limited. The RP, Mr. Keyur J. Shah, was appointed as the Liquidator, with specific directions outlined for the liquidation process, investigation of financial affairs, and submission of reports as per the relevant regulations.

5. Consequences and Communication:
The order for liquidation resulted in the cessation of the moratorium under Section 14 of the Code, initiating a fresh moratorium under Section 33(5). The Tribunal directed the communication of the order to all relevant parties, including the RP, Corporate Debtor, appointed Liquidator, Insolvency and Bankruptcy Board of India (IBBI), and Registrar of Companies (ROC) for compliance and record-keeping purposes.

By analyzing the detailed proceedings and decisions outlined in the judgment, the Tribunal effectively addressed the application for liquidation under the specified sections of the Insolvency and Bankruptcy Code, ensuring compliance with regulations and facilitating the orderly liquidation process for the Corporate Debtor.