2020 (10) TMI 170 - Tri - Insolvency and Bankruptcy

Company liquidation ordered under Insolvency and Bankruptcy Code to protect stakeholder interests

The Federal Bank Limited Versus M/s Sargam Builders Pvt. Ltd.

The Tribunal ordered the immediate liquidation of the company under the Insolvency and Bankruptcy Code, appointing the Resolution Professional as the ... Liquidation of Company - section 33(2) of the Insolvency and Bankruptcy Code - HELD THAT:- It is resolved that: “COC with 77.92% (100% of Members Meeting attended) resolved not to reissue form G further, and not to go for fresh EOI and recommended to file application for Liquidation of company under Sec 33 (2) of IBC 2016 and RP to continue as the liquidator and to file the application for liquidation of the company.” The Corporate Debtor M/s. Sargam Builders Pvt. Ltd. is hereby put under liquidation with immediate effect under Section 33(2) of IBC, 2016 - As the RP has enclosed his consent to continue as the Liquidator and copy of Authorization for Assignment for and on behalf of Indian Institute of Insolvency Professionals of ICAI, along with this application, the Resolution Professional herein, Mr. Jasin Jose, is hereby appointed as Liquidator of the Corporate Debtor under Section 34 of IBC, 2016. Application disposed off. Issues: Liquidation of the Company under IBC, Appointment of Resolution Professional as Liquidator, Police Assistance for Valuation ProcessAnalysis:1. Liquidation Order: The Tribunal received an application under Section 33(2) of the IBC, 2016, requesting the liquidation of the company. The Resolution Professional sought orders to liquidate the company, appoint himself as the liquidator, and obtain police assistance for taking custody of records for the valuation process.2. Background and CIRP Process: The Corporate Insolvency Resolution Process (CIRP) was initiated earlier under Section 7 of the IBC, 2016. The Resolution Professional was appointed following the approval of the Committee of Creditors (CoC). Various legal proceedings and orders, including directions from the NCLAT, impacted the CIRP process.3. CoC Meetings and Decision for Liquidation: After multiple CoC meetings, it was resolved with 100% voting to appoint the Resolution Professional as the Liquidator. Factors leading to the decision for liquidation included longstanding project delays, pending litigations, lack of approvals, minimal bookings, and inadequate infrastructure and staff.4. Non-Cooperation and Valuation Process: The suspended directors did not cooperate with the CoC meetings, prompting the Resolution Professional to seek police assistance for document collection and valuation. The real estate market conditions and project status influenced the recommendation for liquidation to maximize stakeholder value.5. Legal Provisions and Tribunal's Decision: The application for liquidation was made under Section 33(2) of the IBC, 2016, which mandates the Adjudicating Authority to pass a liquidation order upon approval by the CoC. The Tribunal, after reviewing the case records and CoC meeting minutes, ordered the immediate liquidation of the company, appointing the Resolution Professional as the Liquidator and directing adherence to relevant IBC provisions and regulations.6. Order and Directions: The Tribunal ordered the liquidation of the company, appointed the Resolution Professional as the Liquidator, and instructed compliance with IBC provisions and regulations. Police assistance was directed to facilitate the custody and control of the company's records for the liquidation process.7. Conclusion: The Tribunal's comprehensive order addressed the liquidation of the company, the appointment of the Liquidator, and the necessary steps to be taken for the liquidation process, ensuring compliance with legal requirements and safeguarding the interests of creditors.