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of <h1>Committee of Creditors' Liquidation Decision Dismissed for Lack of Evidence & Compliance</h1> <h3>Edelweiss Asset Reconstruction Co. Ltd. Versus K.K. Kadri Paper Mills Pvt. Limited</h3> Edelweiss Asset Reconstruction Co. Ltd. Versus K.K. Kadri Paper Mills Pvt. Limited - TMI Issues:1. Admission of Corporate Debtor into Corporate Insolvency Resolution Process.2. Decision of Committee of Creditors (COC) to go for liquidation.3. Compliance with regulations for liquidation proceedings.4. Appointment of liquidator and fee structure.Analysis:1. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process based on an application by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority directed the disposal of the application.2. The Committee of Creditors (COC) decided to go for liquidation of the Corporate Debtor in its first meeting after considering the condition of plant and machinery, which were not in a position to restart due to long-term closure and corrosion. The application for liquidation lacked supporting evidence and was dismissed, allowing the filing of a fresh application with relevant material.3. The decision for liquidation lacked compliance with Regulation 39C of Corporate Insolvency Resolution Process Regulations, 2016, as no resolution was passed regarding the liquidation proceedings. The application for liquidation was filed within a short period without presenting material supporting the claims, indicating a lack of effort to explore resolution options.4. The appointment of a liquidator was discussed, with Mr. Shyam Sundar Rathi confirmed for the role. The fee structure for the liquidator was detailed, specifying the percentage of realization to be paid over specific periods and the exclusion of certain fees from the net realization amount. The application was dismissed with the liberty to file a new application with proper supporting material for a considered decision.In conclusion, the judgment highlighted the importance of following regulatory procedures, providing substantial evidence to support decisions, and ensuring compliance with the Insolvency and Bankruptcy Code. The dismissal of the application emphasized the need for due diligence and adherence to legal requirements in insolvency proceedings.
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