Company Liquidation Proceeding Continues: Tribunal Orders Asset Sales After Failed Resolution Plan Submission.

The Appellate Tribunal upheld the order of Liquidation under Section 33(1) of the Insolvency & Bankruptcy Code due to the absence of a submitted resolution plan within the required timeframe. The Tribunal instructed the Liquidator to comply with Section 230 of the Companies Act, 2013, for potential compromises or arrangements, and to verify creditor claims as per Sections 33, 38, 39, and 40 of the I&B Code. If no viable revival plan emerges, the Liquidator is to proceed with asset sales. The appeals were resolved with these directives, incurring no costs.

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Issues:
- Challenge to the order of Liquidation under Section 33(1) of the Insolvency & Bankruptcy Code
- Compliance with corporate insolvency resolution process
- Applicability of Section 230 of the Companies Act, 2013

Challenge to Liquidation Order:
The appeal was filed challenging the order of Liquidation under Section 33(1) of the Insolvency & Bankruptcy Code by a Director/Shareholder of the Corporate Debtor. The appellant argued that the corporate insolvency resolution process did not proceed lawfully as all Board of Directors members were not directed to attend the Committee of Creditors meeting. Additionally, the Adjudicating Authority did not extend the time for resolution applicants to submit a plan to prevent liquidation. However, as no resolution plan was submitted within the stipulated time, the order of Liquidation was upheld by the Appellate Tribunal.

Compliance with Corporate Insolvency Resolution Process:
The Resolution Professional stated that no resolution plan was submitted within the required timeframe, leading to the passing of the Liquidation order by the Adjudicating Authority. In light of these facts, the Appellate Tribunal declined to interfere with the order of Liquidation dated December 20, 2018.

Applicability of Section 230 of the Companies Act, 2013:
The Appellate Tribunal directed the Liquidator to proceed in accordance with Section 230 of the Companies Act, 2013, and the decisions in 'Meghal Homes Pvt. Ltd.' and 'Swiss Ribbons Pvt. Ltd.' The Liquidator was instructed to verify all creditor claims, take control of the Corporate Debtor's assets, and conduct business for beneficial liquidation as per Section 35 of the I&B Code. Furthermore, the Liquidator was required to follow the procedures outlined in Sections 33, 38, 39, and 40 for claim verification and admission/rejection. Before selling the Corporate Debtor's assets, the Liquidator must adhere to Section 230 of the Companies Act, 2013, and the Adjudicating Authority may issue necessary orders. If revival efforts fail, the Liquidator should proceed with the sale of assets wholly or partially as per legal requirements.

Conclusion:
The Appellate Tribunal directed the Liquidator to act in accordance with the provided instructions and take steps under Section 230 of the Companies Act, 2013. If the Corporate Debtor's members or creditors propose a compromise or arrangement, the Liquidator should file an application under Section 230 before the NCLT. In case of failure, the Liquidator should proceed with the outright sale of the Corporate Debtor to facilitate the continuation of employee services. The appeals were disposed of with the mentioned directions and observations, without any costs incurred.

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