2020 (11) TMI 515 - Tri - Insolvency and Bankruptcy

Krishna Industrial Corporation Ltd. Faces Liquidation Due to Inactivity and Lack of Investors

In Re : S. Rajendran, Resolution Professional

The Corporate Insolvency Resolution process for Krishna Industrial Corporation Ltd. culminated in a unanimous decision by the Committee of Creditors to ... Liquidation of Corporate Debtor - section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is evident in the averments as contained in the application that in the second meeting of the CoC held on March 5, 2020 the CoC discussed in detail the possibility of resolving through resolution, and considering the fact that the company was not in operation for the last two years and that the industry as such was not attracting new investors now due to the Government policies manufacturing and selling of agricultural fertilizers and also that no concrete information about the prospective investor was provided by the promoter group, the CoC has come to the conclusion to liquidate the corporate debtor. The CoC has unanimously decided to liquidate the company namely the corporate debtor and appoint the present resolution professional as liquidator. Since, no resolution plan has been received by this Authority under sub-section (6) of section 30 of the I and B Code, 2016, before the expiry of the maximum period of 180 days CIR process, in exercise of the powers conferred under sub-clauses (i), (ii) and (iii) of clause (a) of sub-section (1) of section 33 of the I and B Code, 2016, this Authority proceeds to pass the liquidation order - Application allowed. Issues:1. Liquidation order under section 33(2) of the Insolvency and Bankruptcy Code, 2016.Analysis:The judgment pertains to M. A. No. 376 of 2020 in C. P. No. 1053/IB/2018 filed by the resolution professional seeking a liquidation order under section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution (CIR) process was initiated against the corporate debtor, Krishna Industrial Corporation Ltd. (KICL), and the resolution professional, Mr. S. Rajendran, was appointed as interim resolution professional (IRP) pursuant to an order dated December 16, 2019. The IRP took over the management of the corporate debtor and invited claims from creditors as per regulations. The Committee of Creditors (CoC) was constituted, and the resolution professional was appointed as the resolution professional by the CoC in the first meeting held on January 13, 2020.In the second meeting of the CoC on March 5, 2020, it was discussed that due to the company's inactivity for the past two years and lack of interest from potential investors, liquidation of the corporate debtor was deemed necessary. The CoC unanimously decided to liquidate the company and appointed the resolution professional as the liquidator. The resolution for liquidation was approved with the required voting share. The resolution professional consented to act as the liquidator, leading to his appointment for the liquidation proceedings.Since no resolution plan was received within the stipulated time under section 30 of the I and B Code, 2016, the Authority proceeded to pass the liquidation order. The order appointed Mr. S. Rajendran as the liquidator, directing him to comply with all relevant laws and regulations. The liquidator was mandated to issue a public announcement, investigate financial affairs, inform regulatory authorities, and commence the liquidation process as per the Code's provisions. The order also specified the submission of a preliminary report within 75 days from the liquidation commencement date.Overall, the judgment detailed the process leading to the decision for liquidation, the appointment of the liquidator, and the specific directives for the liquidation proceedings in accordance with the Insolvency and Bankruptcy Code, 2016.