Appeals disposed with directions for liquidation. Tribunal allows application under Companies Act for investigation.

The appeals were disposed of with directions for the Adjudicating Authority to pass an appropriate order of liquidation. The Tribunal set aside the impugned order granting liberty to the Resolution Professional and CoC to move before IBBI or Central Government. However, liberty was given to move an application under Section 213 of the Companies Act, 2013, read with Section 74(3) of the I&B Code, before the Adjudicating Authority to decide on referring the matter for investigation and possible action.

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Issues Involved:
1. Initiation and approval of the Corporate Insolvency Resolution Process (CIRP).
2. Withdrawal and non-implementation of the Resolution Plan by Liberty House Group.
3. Alleged discrepancies and misrepresentations in the Information Memorandum and Valuation Reports.
4. Application for exclusion of the period for CIRP.
5. Liquidation process and adherence to the timeline.
6. Jurisdiction and procedural aspects for referring matters to the Insolvency and Bankruptcy Board of India (IBBI) or Central Government for action under Section 74(3) of the I&B Code.

Detailed Analysis:

1. Initiation and Approval of CIRP:
The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was initiated on 24th July 2017 under Section 7 of the Insolvency and Bankruptcy Code (I&B Code) 2016. The Resolution Professional invited prospective Resolution Applicants to submit a Resolution Plan by 31st August 2017. The Committee of Creditors (CoC) approved the revised plan of Liberty House Group Pte Ltd. on 2nd April 2018 with a majority voting share of 94.20%. The Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench) approved the Resolution Plan on 25th July 2018.

2. Withdrawal and Non-Implementation of the Resolution Plan:
Despite repeated reminders, Liberty House Group Pte Ltd. failed to furnish the performance guarantee and open an escrow account as per the terms of the Resolution Plan. Liberty House sought to delete material conditions under the Process Note, which was rejected by the CoC. Consequently, the CoC invoked the Bid Bond Guarantee of Rs. 50 Crores, which was rejected by Barclays Bank due to non-compliance with the prescribed format. Liberty House filed a suit for injunction before the Delhi High Court, seeking to prevent the encashment of the Bid Bond Guarantee.

3. Alleged Discrepancies and Misrepresentations:
Liberty House Group claimed that they discovered discrepancies in the condition of machineries, valuations, and representations made in the Information Memorandum and Valuation Reports. They alleged that the financial statements of the Corporate Debtor were unaudited and standalone, and the investment was overvalued in the Liquidation Reports. Liberty House contended that the projected capacity of the plants was not achievable based on the actual estimations, which were significantly lower.

4. Application for Exclusion of the Period for CIRP:
The CoC and Financial Creditors sought exclusion of the period for counting the total period of 270 days of CIRP. The Adjudicating Authority held that there is no scope for granting an extension beyond 270 days under any circumstances. The Tribunal emphasized that the process should not be restarted as it would defeat the binding timelines provided under the I&B Code.

5. Liquidation Process and Adherence to the Timeline:
The Tribunal noted that more than 270 days had already passed, and there was no ground to exclude any period. It was held that once a plan is approved under Section 31, if it is not implemented, that cannot be a ground to exclude any period. The Tribunal directed that the Adjudicating Authority has no other option but to pass an order of liquidation.

6. Jurisdiction and Procedural Aspects:
The Tribunal observed that the I&B Code is silent on whether the Adjudicating Authority has jurisdiction to refer matters to the IBBI or Central Government for action under Section 74(3). It was clarified that the Adjudicating Authority must follow the principles of natural justice and provide an opportunity of hearing before referring the matter. The Tribunal held that the Adjudicating Authority should refer the matter to IBBI or Central Government if it is satisfied that there are circumstances suggesting fraudulent conduct.

Conclusion:
The appeals were disposed of with directions for the Adjudicating Authority to pass an appropriate order of liquidation. The Tribunal set aside the impugned order granting liberty to the Resolution Professional and CoC to move before IBBI or Central Government. However, liberty was given to move an application under Section 213 of the Companies Act, 2013, read with Section 74(3) of the I&B Code, before the Adjudicating Authority to decide on referring the matter for investigation and possible action.

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