Liquidation Order Issued for Corporate Debtor under Insolvency Code

The National Company Law Tribunal, Mumbai Bench, ordered the liquidation of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Committee of Creditors unanimously passed a resolution for liquidation, authorizing the Resolution Professional to act as the Liquidator. The Tribunal provided detailed directions for the liquidation process, including the appointment of the Liquidator, cessation of the moratorium, and compliance with regulations. The Order specified the entitlement of the Liquidator to fees and cooperation required from personnel connected with the Corporate Debtor during liquidation.

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

In this case, the National Company Law Tribunal, Mumbai Bench, received an application from the Resolution Professional seeking orders for the liquidation of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and the Committee of Creditors (CoC) was constituted. The CoC members discussed the possibility of liquidation due to the lack of physical assets generating future earnings. The CoC meetings involved debates on extending the CIRP period and seeking further Expressions of Interest (EoI). The majority vote share holder was unable to participate in one of the meetings due to internal issues, leading to an adjournment. Eventually, in a subsequent meeting, the resolution for liquidation was passed unanimously, and the Resolution Professional was authorized to proceed with the liquidation process. The Resolution Professional consented to act as the Liquidator, but there were issues regarding the proposed fee, which was rejected by the CoC. The Tribunal, after considering the submissions and being satisfied with the application's compliance with the Code, ordered the liquidation of the Corporate Debtor. The Tribunal provided detailed directions for the liquidation process, including the appointment of the present Resolution Professional as the Liquidator, cessation of the moratorium, transfer of powers to the Liquidator, and compliance with relevant regulations. The Order also specified the entitlement of the Liquidator to fees and the cooperation required from personnel connected with the Corporate Debtor during the liquidation process. The Order was deemed a notice of discharge for the Corporate Debtor's officers, employees, and workmen, except when the business is continued during liquidation. Copies of the Order were to be furnished to relevant authorities and parties involved.

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