Tribunal Orders Liquidation of Corporate Debtor, Appoints Liquidator

The Tribunal ordered the liquidation of the Corporate Debtor, appointed Mr. Rajeev Bansal as the Liquidator, and issued directions for compliance with the relevant provisions and regulations under the Insolvency and Bankruptcy Code. The application was disposed of accordingly.

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Issues Involved:
1. Application for liquidation under section 33 (1) (a) of the Insolvency and Bankruptcy Code, 2016.
2. Appointment of a Liquidator.
3. Compliance with Regulations 39B, 39C, and 39D of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
4. Directions and compliance under Chapter III of the Insolvency and Bankruptcy Code and Liquidation Process Regulations, 2016.

Detailed Analysis:

1. Application for Liquidation under Section 33 (1) (a) of the Insolvency and Bankruptcy Code, 2016:
The Resolution Professional (RP) filed an application seeking the liquidation of Corporate Debtor-Isolux Corsan India Engg & Construction Pvt. Ltd. (Isolux) under section 33 (1) (a) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated on 11-10-2018, and the RP was appointed. Despite multiple extensions and invitations for Expression of Interest (EOI), no resolution plans were received by the final date of 3-6-2019. Consequently, the Committee of Creditors (CoC) unanimously decided to liquidate Isolux as per section 33 (1) (a) of the Code.

2. Appointment of a Liquidator:
In the 14th meeting of the CoC held on 08-11-2019, the agenda to appoint a Liquidator and approve the fees was disapproved. Consequently, the RP did not consent to act as the Liquidator. As per section 34 (4) (c) of the Code, the Adjudicating Authority (AA) appointed Mr. Rajeev Bansal as the Liquidator, following the procedure under sections 34 (5) to (7) of the Code. The Law Research Associate confirmed the credentials of Mr. Rajeev Bansal, and no adverse findings were reported.

3. Compliance with Regulations 39B, 39C, and 39D of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016:
- Regulation 39B: The CoC did not approve a plan for providing contributions to meet the liquidation costs. Instead, a corpus of Rs. 30.00 lacs was sanctioned initially, to be contributed by CoC members in proportion to their voting share. Subsequent contributions were to be made quarterly.
- Regulation 39C: The CoC approved the sale of Isolux’s business as a going concern, specifically the EPC contract awarded by NHAI for the construction of a section of NH 75 in Karnataka.
- Regulation 39D: Since the CoC did not approve the Liquidator’s fees, it was to be paid in accordance with Regulation 4 (2) and 4 (3) of the Liquidation Process Regulations, 2016.

4. Directions and Compliance under Chapter III of the Insolvency and Bankruptcy Code and Liquidation Process Regulations, 2016:
The Tribunal issued several directions to ensure compliance with Chapter III of the Code and the Liquidation Process Regulations, 2016:
- Section 33(5): No suits or legal proceedings shall be instituted against the corporate debtor, except with the Liquidator’s approval.
- Notice of Discharge: The liquidation order serves as a notice of discharge to the officers, employees, and workmen, unless the business continues during liquidation.
- Powers of the Board of Directors: These powers cease and vest in the Liquidator.
- Assistance and Cooperation: Corporate Debtor personnel must assist the Liquidator as required.
- Public Announcement: The Liquidator must publish an announcement within five days, calling stakeholders to submit claims within 30 days.
- Preliminary Report: The Liquidator must file a preliminary report within 75 days and regular progress reports every fortnight.

The Financial Creditors are not restricted from enforcing personal guarantees. The Liquidator is directed to take possession of the Corporate Debtor’s assets.

Conclusion:
The Tribunal ordered the liquidation of Isolux under section 33 (1) (a) of the Code, appointed Mr. Rajeev Bansal as the Liquidator, and provided detailed directions to ensure compliance with the relevant provisions and regulations. The application CA No. 1079/2019 was disposed of accordingly.

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