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

The Corporate Insolvency Resolution process for Krishna Industrial Corporation Ltd. culminated in a unanimous decision by the Committee of Creditors to liquidate the company due to inactivity and lack of investor interest. The resolution professional was appointed as the liquidator, following the absence of a resolution plan within the specified timeframe. The court issued a liquidation order appointing the resolution professional as the liquidator, with instructions to adhere to legal requirements, issue public announcements, investigate financial matters, and initiate the liquidation process as per the Insolvency and Bankruptcy Code, 2016.

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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.

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