Associated Cylinders: Liquidation Order under Insolvency & Bankruptcy Code

The Tribunal ordered the liquidation of the Corporate Debtor, M/s. Associated Cylinders and Accessories Private Limited, under Section 33 of the Insolvency and Bankruptcy Code, 2016. The decision was based on the CoCs' resolution due to the absence of viable Resolution Plans and the Corporate Debtor's cessation of operations since 2017. The Resolution Professional was appointed as the Liquidator, with the Order outlining the transfer of powers and fee entitlement. Compliance measures were directed, effectively concluding the liquidation proceedings.

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Issues:
Liquidation of Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The judgment revolves around the Miscellaneous Application filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking liquidation of the Corporate Debtor. The Corporate Debtor, M/s. Associated Cylinders and Accessories Private Limited, had been undergoing Corporate Insolvency Resolution Process (CIRP) since 10.01.2018, and the 180-day period had expired on 08.07.2018. The decision to liquidate the Corporate Debtor was based on the CoCs' resolution as there were no viable Resolution Plans forthcoming, and the Corporate Debtor had ceased operations since 2017 with a turnover of 'nil' as per provisional accounts.

The CoCs unanimously resolved to appoint the Resolution Professional, Mrs. Satyadevi Alamuri, as the RP during a meeting held on 27.03.2018. Despite efforts to invite Resolution Plans, no viable options emerged, leading to the decision to liquidate the Corporate Debtor. The meeting held on 03.07.2018 resulted in a unanimous resolution to liquidate the Corporate Debtor and appoint the Resolution Professional as the Liquidator, subject to NCLT approval, under Section 33(1)(a) of the I&B Code, 2016.

Based on the facts presented in the Miscellaneous Application and the resolutions passed by the CoCs, the Tribunal, in exercise of powers under Section 33 of the I&B Code, 2016, ordered the liquidation of the Corporate Debtor. The Order detailed the appointment of the Resolution Professional as the Company Liquidator, the cessation of moratorium, and the transfer of powers from the Board of Directors to the Liquidator. The Order also emphasized the cooperation required from the Corporate Debtor's personnel and outlined the fee entitlement of the Company Liquidator for conducting the liquidation proceedings.

The Tribunal's Order directed compliance measures, including sending a copy of the Order to relevant authorities and the Company Liquidator for information and implementation. The judgment effectively concluded the proceedings related to the liquidation of the Corporate Debtor, M/s. Associated Cylinders and Accessories Private Limited, under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.

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