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2022 (4) TMI 1001 - Tri - Insolvency and BankruptcySeeking liquidation of the Corporate Debtor - liquidation sought on the ground that there is no business activity carried on by the Corporate Debtor - HELD THAT - After perusing the minutes of the COC meeting held on 23.02.2022, it is found that there is no business activity carried on by the Corporate Debtor. The Corporate Debtor filed its annual report with ROC up to FY 2009- 10. The realizable value of assets of Corporate Debtor is Nil. The CoC has also resolved by 100% voting share to liquidate the Corporate Debtor even before the expiry of the insolvency resolution process period. When no security is there and resolution has been passed in the CoC with 100 % voting share, it is not worth to continue the CIRP and increase the cost of the CIRP. Section 33(2) of the Code empowers the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates the Adjudicating Authority of the decision of the CoC approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. 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.
Issues:
Liquidation of Corporate Debtor due to lack of business activity and assets. Analysis: The application filed by the Resolution Professional (RP) on behalf of the Committee of Creditors (CoC) sought liquidation of the Corporate Debtor, Berial Engineers Pvt. Ltd., due to the absence of any business activity. The relief requested included public announcement for liquidation, appointment of liquidator, restrictions on legal proceedings, and other necessary directions for the liquidation process. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier based on a petition by an Operational Creditor, and the Interim Resolution Professional was later confirmed as the RP. The RP received claims from UCO Bank and Tata Hitachi Construction Machinery Co. Pvt. Ltd., which were admitted after verification. The Committee of Creditors, consisting solely of UCO Bank as the financial creditor, had 100% voting rights and decided on the liquidation of the Corporate Debtor in a meeting. The RP recommended liquidation due to the Corporate Debtor's lack of assets, business activity, and updated financial information. The CoC approved the liquidation and authorized the RP to approach the Tribunal for necessary orders. After considering the submissions and the CoC meeting minutes, the Tribunal found that the Corporate Debtor had no business activity, outdated financial records, and nil realizable assets. With the CoC's unanimous decision to liquidate the Corporate Debtor, the Tribunal accepted the RP's application for liquidation under Section 33(2) of the Insolvency and Bankruptcy Code. The Tribunal ordered the liquidation of the Corporate Debtor and appointed the RP as the Liquidator, directing the initiation of the liquidation process as per the relevant regulations. The Tribunal also issued directions regarding public notices, cessation of powers of the Board of Directors, cooperation with the Liquidator, legal proceedings, discharge of officers and employees, and filing of the order with the Registrar of Companies. The application under Section 33(2) of the IBC was admitted and disposed of with the specified observations and directions. The Registry was instructed to provide copies of the order to all parties, and a certified copy would be issued upon completion of formalities.
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