NCLT Ahmedabad: Approval for Liquidation Under IBC 2016 Section 33(1)

The National Company Law Tribunal, Ahmedabad Bench, approved the application for liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional's request for liquidation was granted following discussions by the Committee of Creditors, which unanimously voted in favor of liquidation. The judgment highlighted the CoC's commercial wisdom and directed the appointed liquidator to dispose of the company as a going concern. Additionally, the order outlined the asset disposal process in case the going concern sale fails within a specified period, along with instructions for public announcements and communication with the Registrar of Companies.

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Issues: Application for liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016.

The judgment pertains to an application filed by the Resolution Professional (RP) seeking an order of liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016 (IB Code). The case involves the admission of a petition under section 9 of the IB Code, the appointment of an Interim Resolution Professional (IRP), the constitution of the Committee of Creditors (CoC), and the subsequent replacement of the IRP with the RP. The CoC proposed a Forensic Audit due to losses and inventory reduction, leading to the discontinuation of certain services. Claims from various creditors were reviewed, and the RP invited quotations from Forensic Auditors. The CoC meetings discussed the eligibility criteria for resolution plans, absenteeism of suspended board members, and the decision to liquidate the Corporate Debtor Company. The CoC voted unanimously in favor of liquidation, and the RP was appointed as the liquidator. The judgment emphasized the commercial wisdom of the CoC and directed the liquidator to dispose of the company as a going concern. The order also outlined the process for disposal of assets in case the sale as a going concern fails within a specified period, along with directives for public announcements and communication with the Registrar of Companies.

This detailed analysis covers the procedural aspects, decision-making process, CoC discussions, liquidation order, commercial wisdom consideration, and directives for the liquidator as outlined in the judgment delivered by the National Company Law Tribunal, Ahmedabad Bench.

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