Tribunal orders liquidation under Insolvency Code, strict compliance emphasized

The Tribunal admitted a petition under section 10 of the Insolvency and Bankruptcy Code, 2016, declaring a moratorium. The Committee of Creditors decided on liquidation due to the failure to accept a resolution plan. The Tribunal ordered liquidation and appointed a Liquidator, emphasizing strict compliance with legal requirements for the process, including stakeholder claims submission and enforcement of personal guarantees by Financial Creditors. An application seeking participation in the CoC meeting was dismissed.

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Issues:
1. Petition under section 10 of the Insolvency and Bankruptcy Code, 2016.
2. Application for liquidation under section 33 of the Code.
3. Decision of the Committee of Creditors (CoC) for liquidation.
4. Dismissal of application by resolution applicant.
5. Compliance with legal requirements for liquidation process.

Issue 1: Petition under section 10 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal admitted a petition under section 10 of the Insolvency and Bankruptcy Code, 2016, declaring a moratorium under section 14(1) of the Code. Initially, Mr. Yogender Pal Singhal was appointed as the Interim Resolution Professional, later replaced by Mr. Ashish Aggarwal. The Resolution Professional filed an application under section 33 of the Code for liquidation of the corporate debtor after the CoC decision on 11-8-2018.

Issue 2: Application for liquidation under section 33 of the Code:
The Resolution Professional filed an application under section 33(1) (b), (i), (ii), (iii) and 33(2) of the Code seeking liquidation of the corporate debtor in line with the CoC's decision on 11-8-2018. The CoC decided on liquidation due to the failure to accept the resolution plan submitted by M/s Global Business Corporation, which included unacceptable conditions related to the discharge of liabilities of directors.

Issue 3: Decision of the Committee of Creditors (CoC) for liquidation:
The CoC, in its 7th meeting on 11-8-2018, unanimously decided to liquidate the corporate debtor due to the expiry of the extended resolution process period. The Resolution Professional was directed to file an application for liquidation as no time was available for inviting fresh bids. The Tribunal, based on the CoC's decision, ordered the liquidation of the corporate debtor and appointed Mr. Ashish Aggarwal as the Liquidator.

Issue 4: Dismissal of application by resolution applicant:
An application by M/s Global Business Corporation seeking participation in the CoC meeting was dismissed. The Tribunal upheld the dismissal in a detailed order passed on 01-11-2018.

Issue 5: Compliance with legal requirements for liquidation process:
The Tribunal ordered strict compliance with the provisions of the Code and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator was directed to publish a public announcement for stakeholder claims submission, file reports within specified timelines, and ensure adherence to legal proceedings during the liquidation process. Financial Creditors were clarified to have the right to enforce personal guarantees.

This comprehensive summary covers the key issues addressed in the judgment, detailing the legal proceedings and decisions made by the Tribunal regarding the liquidation process under the Insolvency and Bankruptcy Code, 2016.

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