2021 (3) TMI 348 - Tri - Insolvency and Bankruptcy

NCLT approves liquidation of M/s. Harneshwar Agro Products: Jigar Shah appointed as liquidator

PUNJAB NATIONAL BANK Versus HARNESHWAR AGRO PRODUCTS POWER AND YEAST (I) LTD.

The National Company Law Tribunal (NCLT) approved the application for liquidation of the corporate debtor, M/s. Harneshwar Agro Products Power and Yeast ... Seeking liquidation of the corporate debtor - section 33(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The CoC in its second meeting held on September 16, 2019 unanimously passed a resolution for liquidating the company. Accordingly, the resolution professional filed this application for liquidation of the company as provided under section 33 of the Insolvency and Bankruptcy Code, 2016 (Code). Upon hearing the submissions of the applicant and on reading the application and the documents enclosed therein it is found, the RP has complied with the procedure laid down under the Code ; Regulations made thereunder. On verification, this case is considered fit case to pass liquidation order under sub-section (1) of section 33 of the Code for liquidation in the absence of any resolution plan. Application allowed. Issues:1. Application for liquidation of corporate debtor under section 33(1) of the Insolvency and Bankruptcy Code, 2016.2. Appointment of liquidator and payment of fees.3. Compliance with procedures under the Code and regulations.4. Initiation of liquidation process and powers of the liquidator.Issue 1: Application for Liquidation of Corporate DebtorThe resolution professional filed an application seeking liquidation of the corporate debtor, M/s. Harneshwar Agro Products Power and Yeast (I) Ltd., as no resolution plan was received. The National Company Law Tribunal (NCLT) found that the application complied with the provisions of the Insolvency and Bankruptcy Code, 2016. The CoC unanimously passed a resolution for liquidation due to the absence of any prospects for resolution or revival of the company. The NCLT, after verifying the compliance with the Code and regulations, allowed the application and ordered the liquidation of the company under section 33(1) of the Code.Issue 2: Appointment of Liquidator and Payment of FeesThe NCLT appointed Mr. Jigar Shah as the liquidator for the corporate debtor in accordance with section 34(1) of the Code. The order specified that the liquidator would be entitled to fees as per the IBBI (Liquidation Process) Regulations, 2016. It was further directed that the liquidator would have all powers of the board of directors, key managerial personnel, and partners of the corporate debtor, as these roles would cease to have effect and be vested with the liquidator. The order also mandated the liquidator to initiate the liquidation process and issue public notices regarding the liquidation of the corporate debtor.Issue 3: Compliance with Procedures under the Code and RegulationsThe NCLT noted that the resolution professional had followed the procedures laid down under the Code and the regulations. The public announcement and advertisement for expression of interest were made as required. The CoC meetings were held, and necessary steps, such as appointing valuers and preparing the information memorandum, were taken in accordance with the regulations. The decision for liquidation was made after due consideration of the company's prospects for revival, as informed during the CoC meetings.Issue 4: Initiation of Liquidation Process and Powers of the LiquidatorUpon the initiation of the liquidation process, all powers of the board of directors, key managerial personnel, and partners of the corporate debtor were transferred to the appointed liquidator. The liquidator was directed to manage the liquidation process and cooperate with the personnel of the corporate debtor. The order specified that no suit or legal proceeding could be instituted against the corporate debtor, except with the prior approval of the Adjudicating Authority. The liquidation order served as a notice of discharge to the officers, employees, and workmen of the corporate debtor, except for activities continued by the liquidator during the process.