Tribunal Orders Liquidation of Company, Denies Request to Replace Resolution Professional

The Tribunal ordered the liquidation of M/s Tirupati Ceramics Ltd. and appointed Mr. Amit Sharma as the Liquidator. The Liquidator was directed to publish a public announcement and manage the liquidation process as per the Code and applicable regulations. The request to replace the Resolution Professional was denied due to non-fulfillment of the conditions under Section 34(4) of the Code.

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Issues Involved:
1. Replacement of the Resolution Professional.
2. Liquidation of the Corporate Debtor.
3. Appointment of Liquidator.
4. Publication of Public Announcement.
5. Legal Proceedings and Powers during Liquidation.

Issue-wise Detailed Analysis:

1. Replacement of the Resolution Professional:
The financial creditors of the Corporate Debtor filed an application proposing the replacement of the existing Resolution Professional, Mr. Amit Sharma, with Mr. Punkaj Jain. The Committee of Creditors (CoC) decided with 100% votes to replace Mr. Amit Sharma and proposed Mr. Punkaj Jain as the new Resolution Professional. However, the Tribunal noted that Section 27 of the Insolvency and Bankruptcy Code, 2016 (the Code) allows for the replacement of a Resolution Professional during the Corporate Insolvency Resolution Process (CIRP) but does not apply to the liquidation process. The conditions under Section 34(4) for replacing the Resolution Professional were not satisfied, as no resolution plan had been submitted and rejected, and there was no recommendation from the Board for replacement.

2. Liquidation of the Corporate Debtor:
The CoC resolved unanimously to liquidate the Corporate Debtor, M/s Tirupati Ceramics Ltd., as the resolution process had failed. The Resolution Professional had intimated the Adjudicating Authority about the CoC's decision to liquidate the Corporate Debtor. The Tribunal referred to Section 33 of the Code, which mandates the Adjudicating Authority to pass a liquidation order if the CoC decides to liquidate the Corporate Debtor before the confirmation of a resolution plan.

3. Appointment of Liquidator:
The Tribunal ordered that Mr. Amit Sharma, the existing Resolution Professional, would act as the Liquidator for the liquidation process, as per Section 34(1) of the Code. The request to replace Mr. Amit Sharma with Mr. Punkaj Jain was not accepted since the conditions for replacement under Section 34(4) were not met.

4. Publication of Public Announcement:
The Liquidator was directed to publish a public announcement in accordance with Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016, within five days. The announcement should call upon stakeholders to submit their claims within 30 days from the liquidation commencement date. The announcement must be published in one English and one regional language newspaper with wide circulation at the location of the registered office and principal office of the Corporate Debtor, on the Corporate Debtor's website, and on the website designated by the Board.

5. Legal Proceedings and Powers during Liquidation:
The Tribunal directed that no suit or other legal proceedings shall be instituted against the Corporate Debtor, except by the Liquidator with prior approval of the Adjudicating Authority, as per Section 33(5) of the Code. The order for liquidation would serve as a notice of discharge to the officers, employees, and workmen of the Corporate Debtor, except when the business is continued during the liquidation process by the Liquidator. All powers of the Board of Directors, key managerial personnel, and partners of the Corporate Debtor would cease and vest in the Liquidator. The personnel of the Corporate Debtor were directed to extend all assistance and cooperation to the Liquidator.

Additional Directions:
- The Liquidator was instructed to exercise powers and perform duties as prescribed under the Code, Regulations, and applicable Rules.
- The Liquidator must file a preliminary report within 75 days and regular progress reports every fortnight thereafter, as per Regulation 13 of the Liquidation Process Regulations, 2016.
- Financial Creditors are not debarred from enforcing corporate and personal guarantees.

Conclusion:
The Tribunal ordered the liquidation of M/s Tirupati Ceramics Ltd. and appointed Mr. Amit Sharma as the Liquidator. The Liquidator was directed to publish a public announcement and manage the liquidation process as per the Code and applicable regulations. The request to replace the Resolution Professional was denied due to non-fulfillment of the conditions under Section 34(4) of the Code.

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