Tribunal Orders Liquidation of Corporate Debtor under IBC

The Tribunal ordered immediate liquidation of the Corporate Debtor under Section 33(1) of IBC, 2016, following the Committee of Creditors' unanimous decision to ratify the liquidation application and recommend the Resolution Professional as the Liquidator. The Resolution Professional was appointed as the Liquidator, granted full authority to manage the company's affairs, represent the Corporate Debtor, and seek directions from the Adjudicating Authority. The Tribunal approved the Committee of Creditors' resolutions, outlining the liquidation process, estimated costs, and financial institution contributions, marking the end of the moratorium.

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Issues: Liquidation of Corporate Debtor under Section 33(1) of IBC, 2016; Appointment of Liquidator; Approval of Committee of Creditors for Liquidation Process.

Liquidation of Corporate Debtor under Section 33(1) of IBC, 2016:
The Tribunal considered the Interlocutory Application filed by the Resolution Professional seeking liquidation of the Corporate Debtor. The Resolution Professional had followed the necessary procedures under the IBC, including admission of the application, appointment as Interim Resolution Professional, and conducting meetings with the Committee of Creditors. Despite efforts to invite Expression of Interest and extend deadlines, no Resolution Plan was received during the Corporate Insolvency Resolution Process (CIRP). The Committee of Creditors, with 100% voting rights, passed resolutions to ratify the application for liquidation and recommend the Resolution Professional as the Liquidator. The Tribunal, after reviewing the case records and resolutions, ordered immediate liquidation of the Corporate Debtor under Section 33(1) of IBC, 2016.

Appointment of Liquidator:
The Tribunal addressed the appointment of the Resolution Professional as the Liquidator in accordance with Section 34 of IBC, 2016. The Resolution Professional submitted the necessary consent form to act as the Liquidator, which was approved by the Committee of Creditors. The Tribunal appointed the Resolution Professional as the Liquidator of the Corporate Debtor and directed the Liquidator to manage the affairs of the company, with all powers of the Board of Directors, key managerial persons, and partners ceasing to have effect. The Liquidator was authorized to represent the Corporate Debtor before government authorities and seek directions from the Adjudicating Authority during the liquidation process.

Approval of Committee of Creditors for Liquidation Process:
The Tribunal noted the resolutions passed by the Committee of Creditors in its meetings, including the decision to recommend liquidation due to the absence of a Resolution Plan during the CIRP. The Committee also approved the appointment of the Resolution Professional as the Liquidator and outlined the liquidation process, estimated costs, and contributions from financial institutions. The Tribunal directed the Liquidator to issue a Public Notice stating the commencement of liquidation and to coordinate with authorities for necessary information. The moratorium declared earlier ceased to exist with the passing of the liquidation order.

In conclusion, the Tribunal disposed of the Interlocutory Application, affirming the liquidation of the Corporate Debtor, the appointment of the Resolution Professional as the Liquidator, and the necessary steps to be taken for the liquidation process.

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