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TMI Blog2024 (11) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... in short). Aggrieved by the impugned order, the present appeal has been preferred by the shareholder and Ex-Director of the Corporate Debtor. 2. Coming to the factual matrix of the present case, it is noticed that the Corporate Debtor-Sujyot Infrastructure Private Limited which was engaged in the business of construction of re-modelling of buildings was admitted into Corporate Insolvency Resolution Process ('CIRP' in short) on 22.12.2021. The Resolution Professional ('RP' in short) who was appointed following the CIRP admission constituted the CoC comprising of only two members viz. State Bank of India with 78.10% vote share and Bank of Baroda with 21.90% vote share. The CoC in its first meeting held on 28.01.2022 disapproved the agenda for issuance of Form-G and decided to consider the agenda of liquidation of the Corporate Debtor in their next meeting after the CoC members had obtained necessary approval of their competent authorities. The second CoC meeting was held on 09.05.2022 wherein the CoC voted against extension of CIRP period for 90 days on completion of 180 days on 19.06.2022. The second CoC meeting also voted against issue of Form-G by 100% vote share besides ratifyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly as last resort. It was also contended that the decision of CoC is subject to judicial review as has been held by this Tribunal in Hero Fincorp Ltd. v/s M/s Hema Automotive Pvt. Ltd. in CA(AT)(Ins) No. 1540 of 2022. Attention was also adverted to the judgment of the Hon'ble Supreme Court in Vallal Rck v/s M/s Siva Industries & Holdings Ltd. and Ors. in Civil Appeal Nos. 1811-1812 of 2022 wherein it was held that if the decision of CoC is ex-facie arbitrary, the decision of CoC can be set aside. In the present case, when the decision of the CoC was not to accord primacy to resolution, the decision of the CoC was ex facie arbitrary and should have been set aside by the Adjudicating Authority. 4. We have duly considered the arguments advanced by the Learned Sr. Counsel for the Appellant and perused the records carefully. 5. The primary issue for our consideration is whether the CoC with 100% vote share could have directly proceeded for liquidation of the Corporate Debtor without taking any steps for resolution of the Corporate Debtor and, if so, whether in the given factual matrix there were good reasons for the CoC to initiate liquidation of the Corporate Debtor in the exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore not required for the CoC to complete all the steps relating to resolution of the Corporate Debtor prior to the liquidation of the Corporate Debtor and any interpretation to the contrary would clearly be antithetical to the spirit of Section 33(2) and Explanation appended to it wherein the legislature has consciously used the words "any time" for liquidation even before inviting resolution plans. 8. We are therefore of the considered view that the legislative fiat of Section 33(2) read with the explanation clause empowers the CoC for deciding to initiating liquidation even before inviting resolution plans. 9. This brings us to the contention of the Appellant that it is a well settled proposition of law as laid down in Swiss Ribbons (P) Ltd Vs Union of India (2019) 4 SCC17 that IBC is first and foremost a code for reorganisation and insolvency resolution of Corporate Debtor and liquidation should be the last resort. It has also been the contention of the Appellant that judicial review of the decision of the CoC to proceed with liquidation is not precluded since any such decision of the CoC has to be in conformity with the provisions of IBC as has been held by this Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e since 2015. He further informed that the property at Gota is of all the three companies and it is a customized property which cannot be sold in bits and pieces. Bank of Baroda once again stated that no proposal has been received by CoC in regard to consideration, etc. for revival of the Company even though considerable time of more than 6/7 years has been lapsed and as CIRP being time bound process, CoC cannot wait further for unreasonable/undefined time...... At this stage, Mr. Kakkad, Director Suspended, stating that although he does not have voting right, he expressed his views to explore the opportunities to review the company rather than go for liquidation initially. But SBl and BoB were of the view that since there was no resolution plan received in other two companies also and as there is no operational activity since more than 5/7 years, upon exercising their commercial wisdom decided that liquidation will be the best possible way. Even Bank of Baroda stated that while taking CD into Liquidation. It will give an added advantage to sell the combined assets of all three companies situated @ Gota. Minutes of 2nd phase of the 1st CoC meeting held on 29.01.2022 Discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Bank of Baroda to give view to which Mr. Bhavesh Modi from Bank of Baroda expressed same concerned which Mr. Nitin Chauhan expressed. Mr. Modi further added that when possession of the property is not with the RP and if the incomplete IM will be provided to the prospective investor and if he acts upon the same, the same may lead to very serious complications in future and hence, they also of the opinion to proceed with the liquidation." ( Emphasis supplied ) Thereafter voting was conducted and with 100% of voting share it was resolved that Form-G and its publication is not approved/rejected by the Committee of Creditors. Further with 100% of voting share it was also resolved the liquidation process for M/s Sujyot Infrastructure Private Limited be initiated and the RP was authorised to file an application with NCLT for initiation of liquidation. 12. Against this backdrop of the minutes recorded in the first and second CoC deliberations, it is clear that the CoC members in the very first meeting had taken notice of the fact that the Corporate Debtor was not a going concern and was closed for last past 5-7 years and therefore revival was not possible. The CoC had also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly the scenario was dim for coming up with a holistic and comprehensive IM sans which the issue of Form-G becomes a meaningless exercise. Accordingly, the second CoC meeting after due deliberations had decided not to publish Form- G. 14. We also notice that the CoC has taken note of the fact that even the asset of the Corporate Debtor was under the attachment of Enforcement Directorate. It is also relevant to note that the CoC had taken cognizance of the fact that no resolution plan was received in the case of other two sister companies of the Corporate Debtor leading to their liquidation and by taking up liquidation of the present Corporate Debtor too, it would give an added advantage to sell combined assets of all three companies located at Gota. It is clear that the CoC had considered at length whether there was any chance to revive and restart the Corporate Debtor. Even though the decision for liquidation of the Corporate Debtor was taken after holding only two meetings, this decision was taken by the CoC after holding well considered deliberations with 100% vote share. 15. Given the conspectus of facts in the present case, CoC's decision to liquidate cannot be looked upo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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