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TMI Blog2018 (9) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ium in terms of Section 14 of the Code and by another order dated 11.10.2017, Mr. Bhupesh Gupta, Registered Resolution Professional, was appointed as Interim Resolution Professional with necessary directions. The Interim Resolution Professional constituted a Committee of Creditors, comprising of 12 Financial Creditors, mostly banks except for SBI Global Factors Limited with 0.65% of the voting share. The Committee of Creditors confirmed the Interim Resolution Professional as Resolution Professional in first meeting of the Committee of Creditors, held on 09.11.2017. 3. It is stated in CA No.266 of 2018, filed by the Resolution Professional that the Interim Resolution Professional caused the public announcement on 13.10.2017 and on evaluating the claims received from Financial Creditors, the Committee of Creditors was constituted. The Valuers were also appointed and liquidation value of the Corporate Debtor was got assessed. The Valuation Reports are at Annexure A-2 (Colly). 4. Thereafter, the Committee of Creditors in the meeting held on 27.12.2017, finalized the criteria for inviting Expression of Interest ('EOI') for submission of the Resolution Plan and publication of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional was advised to invite the fresh Resolution Plans with the same terms and conditions in the meeting held on 25.05.2018. The publications were again made, but no fresh bids were received. However, the previous Resolution Applicants had expressed their intention to come out with a better Resolution Plan. In the meeting held on 13.06.2018, the joint Applicants presented the Resolution Plan of Rs. 231.16 Crores, out of which Rs. 200 Crores was meant for the Financial Creditors, Rs. 14.14 Crores for operational creditors and Rs. 17.02 Crores towards the statutory dues with the further details of the Plan. The Committee of Creditors discussed the plan and rejected the same unanimously as the upfront cash payment of Rs. 70 Crores was considered too low and the remaining deferred payment of Rs.130 Crores was over a prolonged period of 7 years that too was unsecured. The COC advised the Resolution Applicants in the meeting held on 13.06.2018 to come up with a better plan by 18.06.2018. However, no new offer was made. Copy of the minutes of meeting dated 13.06.2018 is at Annexure A-1. This application has been filed by describing the aforesaid facts. 9. CA No.265 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their effective Resolution Plans. Reply to that application has also been filed by the Resolution Professional. 15. We are of the considered view that challenge to the related party transactions in an application under Section 60(5) read with various other provisions of the Code, is a separate subject and that application is to be decided after hearing the parties in detail. That application in fact, has been filed by a shareholder, having 10.50% of the shareholding in the share capital of the company of the Corporate Debtor. 16. If the period of 270 days from the commencement of insolvency resolution process has expired and no Resolution Plan was approved, the only consequence is the liquidation of the resolution of the Corporate Debtor. Relevant part of Section 33 of the Code read as under:- "33. (1) where the Adjudicating Authority, - (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinues to carry on the business as a Liquidator and that he sells the Corporate Debtor as a going concern. The Applicant No. 2 to 4, who are described as the office bearers of the Association, are also stated to be the employees of the Corporate Debtor. So, in these circumstances, without going into the question whether the applicant No.1 is a recognized Association, the above aspect as to how to deal with the company by liquidator can be discussed in view of the applicable provisions of the Code and Regulations aforesaid. 20. Looking into the fact that the Corporate Debtor is admittedly a going concern, we hope and expect the Liquidator to abide by the aforesaid provisions of the Code and Regulation 32 of the Liquidation Process Regulations, 2016. 21. In view of the decision by the Committee of Creditors and no Resolution Plan having been put up for approval despite expiry of 270 days, we are satisfied that the provisions of Section 32(2) are complied with and we order that the Corporate Debtor be liquidated in the manner as laid down in Chapter III of the Code. Further directions are issued to the Liquidator to issue a public announcement, stating that the Corporate Debtor is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidation process by the liquidators in view of the observations made above; (iii) All the powers of the Board of Directors, key managerial personnel and the partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested in the liquidator; and (iv) The personnel of the Corporate Debtor shall extend all assistance and cooperation to the liquidator as may be required by him in managing the affairs of the Corporate Debtor and provisions of Section 19 of the Code shall apply in relation to voluntary liquidation process as they apply in relation to liquidation process with the substitution of references to the liquidator for references to the Interim Resolution Professional. 25. The Liquidator shall publish public announcement in accordance with Regulation 12 of the Liquidation Process Regulations, 2016 and in Form B of Schedule II of these Regulations within five days from receipt of this order calling upon the stake holders to submit their claims as on liquidation commencement date and provide the last date for submission of claim which shall be 30 days from the liquidation commencement date. 26. It is further directed that the announcement s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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