2019 (4) TMI 2005 - Tri - Insolvency and Bankruptcy

Tribunal Orders Liquidation Process for Corporate Debtor

The Tribunal directed the Resolution Professional (RP) to convene a meeting of the Committee of Creditors (CoC) to obtain a mandate for the Liquidation ... Liquidation of Corporate Debtor - Section 33(1)(a) of IBC, 2016 - HELD THAT:- No Resolution Plan has been received by the RP and the company is not running, the CoC is requested this Bench to issue an appropriate order under the provisions of Section 33(1)(a) of the Code - this Bench having noticed that the CoC has approved resolution for liquidation of this company under Section 33(1)&(2) of IB Code, 2016 and the Regulations thereof. The Corporate Debtor be liquidated in the manner as laid down in the Chapter III by issuing a Public Notice stating that the Corporate Debtor is in liquidation with a direction to the Liquidator to send this order to RoC under which this Company has been registered - Application allowed. Issues:1. Liquidation process initiation without Expression of Interest (EoI) by any party.2. Request for Liquidation by Committee of Creditors (CoC) with 100% voting share.3. Failure to comply with the order by Resolution Professional (RP).4. Appointment of Liquidator and progress in Corporate Insolvency Resolution Process (CIRP).5. Liquidation order under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016.6. Duties and powers of the appointed Liquidator.7. Co-ordination with authorities and recovery of assets during Liquidation.8. Appointment of valuers for determining liquidation value of assets.9. Handover of documents from outgoing RP to incoming Liquidator and payment of fees.10. Ceasing of moratorium and submission of progress report by the Liquidator.Analysis:1. The Tribunal directed the RP to convene a meeting of CoC to obtain a clear mandate on the Liquidation process due to the absence of any Expression of Interest (EoI). A Liquidator was nominated in a subsequent meeting for the initiation of the Liquidation process.2. The CoC, with 100% voting share, requested the Tribunal for Liquidation of the Corporate Debtor based on their recommendation in a previous meeting. An Affidavit was submitted to support this request.3. The RP faced criticism for not complying with the Tribunal's order dated 30.01.2019, leading to a meeting of Joint Lenders who approved the appointment of a new Liquidator, Mr. Vijay Lulla. The CoC decided to proceed with Liquidation due to RP's failure to conduct the CIRP effectively.4. The order for Liquidation under Section 33(1) of the Code was issued by the Tribunal based on the CoC's approval and the Regulations. Mr. Vijay Lulla was appointed as the Liquidator to manage the affairs of the Corporate Debtor with specified powers and responsibilities.5. The Liquidator was directed to coordinate with authorities, recover assets, seek directions from the Tribunal if necessary, and take legal action to recover trade receivables and other credits. Authorization to represent the Corporate Debtor before Government Authorities was also granted.6. The Liquidator was instructed to appoint valuers for determining the liquidation value of assets and to obtain an average liquidation value as per the regulations. The outgoing RP was directed to hand over all documents to the incoming Liquidator.7. The Liquidator was mandated to submit a progress report on liquidation, and the moratorium declared earlier ceased to exist. The Liquidator was required to submit the progress report on the next hearing date listed.This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive understanding of the Tribunal's decision and the legal implications involved.