2022 (7) TMI 613 - Tri - Insolvency and Bankruptcy

Seeking liquidation of the Corporate Applicant - Corporate Applicant is not carrying on any business since the past three years - Section 33(2) of IBC - HELD THAT - Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Applicant before the confirmation of Resolution Plan, where the Committee of Creditors decide to liquidate the Corporate Applicant with more than sixty-six percent voting share. 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: Application for liquidation of a corporate debtor not carrying on business for three years. Appointment of liquidator.

Analysis:
1. The Tribunal received an application from the Resolution Professional, acting on the instructions of the Committee of Creditors (CoC), seeking liquidation of a Corporate Applicant, Mayur Manpower Services Private Limited, due to its inactivity for the past three years.

2. The Adjudicating Authority had earlier directed the initiation of Corporate Insolvency Resolution Process (CIRP) for the Corporate Applicant and appointed an Interim Resolution Professional.

3. The CoC, comprising one Financial Creditor, decided to appoint a Resolution Professional to initiate liquidation proceedings as the Corporate Debtor had ceased business operations, faced financial challenges, and had significant liabilities exceeding assets.

4. The Resolution Professional agreed to act as the Liquidator, as required under the Insolvency and Bankruptcy Code, and filed an application for liquidation after the CIRP period expired.

5. The Tribunal, after considering submissions, ordered the liquidation of the Corporate Debtor and appointed the Resolution Professional as the Liquidator, in line with the Code's provisions.

6. The Liquidator was tasked with managing the liquidation process, issuing public notices, taking over the powers of the Board of Directors, and ensuring cooperation from the Corporate Debtor's personnel.

7. Legal proceedings against the Corporate Debtor were restricted during liquidation, with the Liquidator empowered to act on behalf of the Corporate Debtor with prior approval from the Adjudicating Authority.

8. The liquidation order served as a discharge notice to the Corporate Debtor's officers, employees, and workmen, except for ongoing business activities managed by the Liquidator.

9. The Liquidator was directed to file the order with the Registrar of Companies and the Registry for compliance and dissemination, while the application for liquidation was disposed of as per the Tribunal's directions.

10. The Registry was instructed to inform all relevant parties and issue certified copies of the order, with a follow-up hearing scheduled to monitor progress on the matter.