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TMI Blog2022 (5) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Liquidator - HELD THAT:- Section 34(1) of the Code provides that where the Adjudicating Authority passes an order for liquidation of the Corporate Debtor under Section 33, the Resolution Professional appointed for the CIRP shall, subject to submission of written consent, act as the Liquidator for the purpose of Liquidation. Section 34(4)(a) of the Code states that the resolution plan submitted by the resolution professional was rejected for failure to meet the requirements, the Adjudicating Authority shall by order replace the RP - In the present case, it is stated in the application that the plan submitted by the Resolution Professional was not approved in the CoC meeting and the final Resolution Plan was rejected by the CoC on 02.09.2020. Sub Section (7) of Section 34 of the Code says that the Adjudicating Authority shall, on receipt of the proposal of the Board for the appointment of an Insolvency Professional as Liquidator by an order appoint such Insolvency Professional as Liquidator. Application admitted. - IA No. 357/2020 in C.P. (IB) No. 220/BB/2018 - - - Dated:- 26-4-2022 - Ajay Kumar Vatsavayi , Member ( J ) And Manoj Kumar Dubey , Member ( T ) For the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Company Law Appellate Tribunal and Regulation 40C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2016, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown. Thus the CIRP time line got extended up to 04.07.2020. 7. On 06.03.2020, the Resolution Professional received a plan from Prospective Resolution Applicant, which was placed before the CoC members on 09.03.2020 and feedback was received from the members. The resolution plan submitted by the Prospective Resolution Applicant contained certain defects, hence a revised Resolution Plan was submitted on 27.06.2020 and 30.06.2020. 8. On 03.07.2020 at 9.11 pm, a revised Resolution Plan was submitted by the Prospective Resolution Applicant for the discussion and voting of the CoC on 04.07.2020, where in the Resolution Applicant was also present. The CoC members discussed the Resolution Plan dated 03.07.2020 and were of unanimous view that since the Resolution Plan has been shared with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Votes cast in favour of the Agenda item B3 is 49.65% by Axis Bank (through email), Bank of Baroda (Erstwhile Vijaya Bank), Bank of India (Bangalore Large Corporate Branch), IDBI Bank Ltd., Bank of Maharashtra, Union Bank of India Punjab National Bank through E-Voting. Phoenix ARC Private Limited Trustee of Phoenix trust FY 16-23, Pegasus ARC Pvt. Ltd. and Central Bank of India together having 37.17% voted against the resolution. State Bank of India having 13.18% has not voted. Since the votes in favour of item B3 are 57.18% and is less than 66% of the voted share of the members of CoC, hence the resolution/agenda item is taken as NOT APPROVED. 11. The above narration of facts reveals that no Resolution Plan was approved by the CoC with required percentage of voting share. The Resolution seeking for passing of Liquidation order also didn't get the required percentage of voting share from the CoC. Similarly, the Resolution seeking for appointment of existing RP as a Liquidator and also the Resolution seeking for appointment of a new RP as a Liquidator also didn't get the required percentage of the voting share in the 11th Meeting of the CoC held on 29.08.2020. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum. 15. Prescribed period for filing application - In the present case, the Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 was admitted on 02.08.2019 and the period of 180 days were completed on 28.01.2020. As per Order dated 14.01.2020 in IA No. 23/2020 this Adjudicating Authority has allowed to extend the CIRP period by 90 days till 27.04.2020. Due to Covid-19 pandemic, lock down was imposed from 25.03.2020 till 31.05.2020 in Bengaluru, thus the CIRP was extended to expire on 04.07.2020. The IA No. 240/2020 filed by the Resolution Professional seeking to extend the CIRP period by 30 days, thus the CIRP has expired on 04.09.2020. The present application is filed on 09.09.2020 i.e., after the expiry of the CIRP period. Hence, this application shall be considered under Section 33(1), but not under Section 33(2). 16. Appointment of Liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. IBBI/2019-20/GN/REG/048 dated 25.07.2019. Relevant aspects in this respect are examined hereunder:- a. Liquidation Cost [Regulation 39B of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016] - The CoC has not made compliance of Regulation 39B of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 regarding the meeting of liquidation costs. The Liquidator is, therefore, directed to take necessary action under Regulation 2A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 regarding the contributions to liquidation costs. b. Assessment of Sale as a going concern [Regulation 39C of IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016] - The CoC has not made any recommendation regarding sale of the Corporate Debtor as a going concern. Therefore, the Liquidator is directed to refer Regulation 32A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016 and take necessary action. c. Fees of the Liquidator [Regulation 4(2) of the Insolvency and Bankruptcy Board of India (Liquidation P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kruptcy Board of India (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. vii. That the announcement shall be published in accordance with Regulation 12(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation 2016. viii. That in accordance with Regulation 13 of the Insolvency and Bankruptcy Board of India (Liquidation Process), Regulations, 2016, the 'Liquidator' shall file his preliminary report within 75 days and to file regular progress reports as per Regulation 15 every fortnightly thereafter. ix. The Liquidator shall file his written consent within one week from today. 21. Thus I.A. No. 357 of 2020 stands disposed of. 22. Copy of this order be supplied to the Counsel for the Liquidator as well as to the Registrar of Companies, Bengaluru forthwith. The Registry is also directed to send a copy of this order to the Liquidator at his e-mail add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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