2020 (11) TMI 847 - Tri - IBC

Corporate Debtor Liquidation Ordered; Resolution Professional Named Liquidator Under Insolvency Code.

The Tribunal ordered the liquidation of the Corporate Debtor, appointing the Resolution Professional as the Liquidator under sections 33 and 34 of the ... Liquidation of corporate debtor under Insolvency and Bankruptcy Code - Commercial wisdom of Committee of Creditors - Cessation of moratorium on liquidation - Exemption of lockdown period for filingLiquidation of corporate debtor under Insolvency and Bankruptcy Code - Commercial wisdom of Committee of Creditors - Cessation of moratorium on liquidation - Application for initiation of liquidation of the Corporate Debtor was allowed and the moratorium was ordered to cease from the date of liquidation. - HELD THAT: - The Adjudicating Authority found that the Committee of Creditors had resolved in its Sixth meeting that there was no possibility of receiving a resolution plan and had therefore decided for liquidation. The Authority observed that it has no jurisdiction to interfere with the commercial wisdom of the CoC and relied on the settled principle that the Adjudicating Authority cannot reverse the commercial decision of the CoC. On that basis, the application under Sections 33 and 34 of the Code was allowed, an order for liquidation was passed, the moratorium under Section 14 was directed to cease with effect from the liquidation order, and the RP was appointed as Liquidator. [Paras 3, 5]IA 491 of 2020 under Sections 33 & 34 is allowed; liquidation of Neuromed Imaging Centre Private Limited is ordered and the RP shall act as Liquidator; moratorium ceases from the liquidation order.Exemption of lockdown period for filing - Lockdown period from 25.03.2020 to 31.05.2020 was exempted for the purpose of filing the instant application. - HELD THAT: - The Authority expressly exempted the period of national lockdown stated in the application from the computation of filing time for the instant IA, thereby allowing the application despite the delay attributable to the lockdown period. [Paras 5]The lockdown period 25.03.2020 to 31.05.2020 is exempted from filing the application; IA is partially allowed and disposed of with the observations recorded.Final Conclusion: The Tribunal allowed the RP's application under Sections 33 and 34 for liquidation, appointed the RP as Liquidator, directed cessation of the moratorium from the liquidation order, and exempted the lockdown period 25.03.2020 to 31.05.2020 from filing computation; the IA is disposed of accordingly. Issues:Liquidation of Corporate Debtor under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016; Exemption of Lockdown period from filing application.Analysis:The case involved an application filed by the Resolution Professional (RP) of the Corporate Debtor seeking liquidation under sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016, and exemption of the Lockdown period from the application filing. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the Committee of Creditors (CoC) decided for the replacement of the Interim Resolution Professional (IRP) with a new RP. The CoC further resolved for an extension of 90 days beyond the initial 180 days of CIRP, leading to a decision for liquidation as no Resolution Plan was forthcoming.The Tribunal, after considering the facts and records, noted the CoC's decision for liquidation and emphasized its lack of jurisdiction to interfere in the commercial wisdom of the CoC. Citing relevant legal precedents, the Tribunal highlighted that the commercial wisdom of the CoC is paramount in such matters, and the Adjudicating Authority cannot reverse it. Therefore, the Tribunal passed orders for the cessation of the moratorium, issuance of a public announcement for liquidation, and other necessary directions for the Liquidator.The Tribunal's orders included the transfer of powers from the Board of Directors to the Company Liquidator, restrictions on legal proceedings against the Corporate Debtor, and instructions for the Liquidator's conduct during the liquidation process. The Liquidator was directed to manage the affairs of the Corporate Debtor, with the personnel required to provide cooperation. The Tribunal also specified the Liquidator's fee structure and directed communication of the order to relevant authorities for compliance.Conclusively, the Tribunal allowed the application for liquidation, appointing the RP as the Liquidator for the Corporate Debtor. The exemption of the Lockdown period from the application filing was granted, and the Tribunal partially allowed and disposed of the application accordingly.