2018 (10) TMI 979 - Tri - Insolvency and Bankruptcy

Court upholds liquidation decision for M/s. Gujarat NRE Coke Limited. Appeal pending. Stay on asset sales.

The court upheld the decision for liquidation of the corporate debtor, M/s. Gujarat NRE Coke Limited, due to the unviability of any resolution plan within ... Corporate Insolvency Resolution Process (CIRP) - Resolution Professional as well as the CoC did not receive any Resolution Plan worth to be considered - order was challenged by one of the unsuccessful resolution application - Held that:- The appeal is pending for consideration by Hon'ble NCLAT. On 4.5.2018 NCLAT passed an order stating - “post appeal for consideration on 18.05.2018”. “During pendency of appeal liquidator / adjudicating authority may proceed with the liquidation proceeding but will not sale immovable or movable property of the corporate debtor nor confirm any sale, if already made, without prior permission of the Appellate Tribunal.” It further appears that meantime the promoter/director filed application for arrangement under sections 230-232 of the Companies Act, 2013 and that application was pending for consideration. On 12.07.2018 the Hon'ble Appellate Tribunal passed order that, “Until further orders, meetings of Secured/Unsecured Creditors and Shareholders shall remain stayed. Pendency of the appeal will not come in the way of Tribunal to decide question of maintainability of the petition under sections 230-232 of the Companies Act, 2013”. Now this application is filed by the promoter/director with a prayer to direct RP/Liquidator not to proceed with any sale proceeding till outcome of the meeting of the shareholders. Since Hon'ble NCLAT stayed the meetings of the Shareholders/Creditors (Secured and Unsecured), this application now become infructuous and stands disposed of. Issues Involved:1. Liquidation process of a corporate debtor under the Insolvency & Bankruptcy Code 2016.2. Challenge to the order of liquidation by an unsuccessful resolution applicant.3. Application for arrangement under sections 230-232 of the Companies Act, 2013.4. Stay on meetings of Secured/Unsecured Creditors and Shareholders by the Hon'ble Appellate Tribunal.5. Request to direct the Resolution Professional/Liquidator not to proceed with any sale until the outcome of the shareholders' meeting.Analysis:1. The judgment pertains to a corporate debtor, M/s. Gujarat NRE Coke Limited, undergoing liquidation as per the Insolvency & Bankruptcy Code 2016. The Resolution Professional, appointed during the Corporate Insolvency Resolution Process (CIRP), reported the unviability of any resolution plan within the stipulated 270 days, leading to the decision for liquidation.2. An appeal challenging the order of liquidation was filed by M/s. Jindal Steel and Power Limited, which is pending consideration before the Hon'ble NCLAT. The NCLAT issued an order allowing the liquidation proceedings to continue but restricted the sale of any assets without prior permission.3. Concurrently, a promoter/director of the corporate debtor filed an application under sections 230-232 of the Companies Act, 2013 for an arrangement, which was under review. The Hon'ble Appellate Tribunal intervened, staying the meetings of Secured/Unsecured Creditors and Shareholders until further orders, emphasizing that the appeal should not impede the Tribunal's decision on the petition's maintainability.4. Subsequently, the promoter/director filed an application seeking a directive to halt any sale proceedings by the Resolution Professional/Liquidator until the shareholders' meeting outcome. However, due to the stay imposed by the Hon'ble NCLAT on the meetings, the application was deemed infructuous and was disposed of accordingly.5. The judgment highlights the complex interplay between the Insolvency & Bankruptcy Code 2016 and the Companies Act, 2013, showcasing the legal intricacies involved in the resolution and liquidation processes of corporate debtors, along with the regulatory oversight by the appellate authorities to ensure procedural fairness and protection of stakeholders' interests.