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of <h1>Tribunal corrects errors, grants liquidation under IBC due to lack of viable plans. RP appointed as Liquidator.</h1> <h3>IVRCL Ltd. And First Global Finance (P.) Ltd. Versus State Bank of India</h3> IVRCL Ltd. And First Global Finance (P.) Ltd. Versus State Bank of India - [2021] 227 Comp Cas 854 (NCLT - Hyd) Issues Involved:1. Correction of Errors in the Tribunal's Order.2. Application for Liquidation of the Corporate Debtor.3. Rejection of Resolution Plan by the Committee of Creditors (COC).4. Intervention Application by the Unsuccessful Resolution Applicant.Issue-wise Detailed Analysis:1. Correction of Errors in the Tribunal's Order:The Tribunal addressed a memo filed by the Resolution Professional (RP) seeking corrections in the order dated 26.07.2019. The errors identified were:- Inserting the phrase 'as going concern' after the company's name in Para 25(i).- Correcting the name of the RP from Mr. R. Ramakrishna Gupta to Mr. Sutanu Sinha in Para 25(viii).The Tribunal acknowledged these errors and made the necessary corrections, stating that the rest of the contents of the original order remain unchanged. This Corrigendum Order is to be read along with the original Order.2. Application for Liquidation of the Corporate Debtor:The RP filed an application under Section 33 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking:- An order for the liquidation of the Corporate Debtor.- Restraining the invocation of any bank guarantees extended by the Corporate Debtor.- Allowing the RP to continue as the liquidator with the same fee structure and support team.The Tribunal noted that the Corporate Debtor's CIRP was initiated by the State Bank of India and admitted on 23.02.2018. Despite multiple attempts to invite Resolution Plans, no valid plan was submitted within the stipulated time. Consequently, the RP sought liquidation.3. Rejection of Resolution Plan by the Committee of Creditors (COC):The COC rejected the Resolution Plan submitted by the Original/Reconstituted Consortium due to:- Deviation from the EOI criteria.- Non-submission of the Earnest Money Deposit (EMD).- Non-compliance with the minimum qualification criteria.- Commercial unacceptability of the plan.The Tribunal emphasized that the commercial wisdom of the COC cannot be questioned or intervened by the Adjudicating Authority. The Supreme Court in K. Shashidhar v. IOB and Swiss Ribbons v. Union of India has upheld this principle. Consequently, the Tribunal dismissed the intervention application (IA No. 680/2018) filed by the unsuccessful Resolution Applicant challenging the COC's decision.4. Intervention Application by the Unsuccessful Resolution Applicant:The unsuccessful Resolution Applicant filed an intervention application (IA No. 680/2018) seeking to:- Intervene in the liquidation proceedings.- Set aside the COC's decision to reject the Resolution Plan and resolve to liquidate the Corporate Debtor.- Declare the consortium eligible for submitting the Resolution Plan.- Direct the COC to reconsider the 5th Resolution Plan submitted on 16.11.2018.The applicant argued that the COC's rejection was arbitrary and not in line with the objectives of the IBC, which prioritize resolution over liquidation. The applicant also claimed that the EMD was eventually paid, and the eligibility criteria were met.Despite these arguments, the Tribunal upheld the COC's decision, stating that the COC's commercial wisdom is paramount and cannot be overridden by the Adjudicating Authority. The Tribunal noted that the COC's decision was taken after much discussion and deliberation and was not arbitrary.Final Order:The Tribunal ordered the liquidation of the Corporate Debtor under Section 33 of the IBC, 2016. The RP, Mr. Sutanu Sinha, was appointed as the Liquidator. The moratorium under Section 14 ceased, and all legal proceedings against the Corporate Debtor were stayed, except those initiated by the Liquidator. The Tribunal also directed the Liquidator to issue a public announcement and comply with the necessary regulations. The application for liquidation (IA No. 544/2018) was thus disposed of.
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