Tribunal orders liquidation of ABG Shipyard Limited under Insolvency Code

The Tribunal ordered the liquidation of ABG Shipyard Limited under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, as the Corporate Debtor was not a going concern and the Committee of Creditors approved liquidation. The RP was appointed as the Liquidator. Outstanding dues to employees were directed to be paid from specific funds. The Tribunal identified and ordered further investigation into preferential, undervalued, and fraudulent transactions, including the reversal of wrongfully appropriated fixed deposits by the Bank of Baroda.

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Issues Involved:
1. Application for liquidation of the Corporate Debtor.
2. Payment of outstanding salaries and wages to employees and workmen.
3. Preferential, undervalued, and fraudulent transactions.
4. Appropriation of fixed deposits by the Bank of Baroda.
5. Transactions classified as fraudulent/wrongful trading.

Issue-wise Detailed Analysis:

1. Application for Liquidation of the Corporate Debtor:
The application for liquidation was filed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 by the Resolution Professional (RP) for ABG Shipyard Limited. The Tribunal noted that the Corporate Debtor was not a going concern and the Committee of Creditors (CoC) had approved the liquidation with a voting share of 84.63%. The Tribunal referenced Section 33 of the Code, which mandates liquidation if no resolution plan is received or approved. The Tribunal confirmed the CoC's decision, emphasizing the commercial wisdom of the CoC, and ordered the liquidation of the Corporate Debtor, appointing the RP as the Liquidator.

2. Payment of Outstanding Salaries and Wages to Employees and Workmen:
The employees and workmen filed an application for payment of their outstanding dues. The Tribunal noted that the RP and CoC had received Rs. 9,55,82,571/- from the Coast Guard, out of which Rs. 2,75,00,000/- was apportioned for payment to workmen. The Tribunal directed the deposit of this amount with the NCLT Registry and disposed of the application.

3. Preferential, Undervalued, and Fraudulent Transactions:
The RP identified several transactions as preferential, undervalued, and fraudulent under Sections 43, 45, and 66 of the Code. These included transactions with ABS Resources Private Limited, Mahavir Distributor Private Limited, ABG International Private Limited, and Nor Crane & Winch Private Limited. The Tribunal found that certain transactions were preferential and undervalued, executed within the look-back period of two years before the commencement of insolvency proceedings. The Tribunal allowed the application, directing further investigation into these transactions.

4. Appropriation of Fixed Deposits by the Bank of Baroda:
The RP filed an application against the Bank of Baroda for appropriating Rs. 9,73,83,818/- in violation of the moratorium order. The Tribunal found that the bank was aware of the moratorium and directed it to reverse the appropriated amount and pay accrued interest. The application was allowed.

5. Transactions Classified as Fraudulent/Wrongful Trading:
The RP identified transactions with ABG Shipyard Singapore Pte. Limited as fraudulent under Section 66 of the Code. The Tribunal found that these transactions were not in the ordinary course of business and appeared to defraud creditors. The Tribunal allowed the application, directing further investigation into these transactions.

Conclusion:
The Tribunal ordered the liquidation of ABG Shipyard Limited, appointed the RP as the Liquidator, and directed the payment of outstanding dues to employees from specific funds. It also identified and directed further investigation into several preferential, undervalued, and fraudulent transactions, and ordered the reversal of wrongfully appropriated fixed deposits by the Bank of Baroda.

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