Tribunal Orders Liquidation of Varanasi Auto Sales Limited: Resolution Plan Absence Leads to Liquidation Process

The Tribunal ordered the liquidation of Corporate Debtor Varanasi Auto Sales Limited due to the absence of a resolution plan, with the Committee of Creditors recommending liquidation and a lack of compliance with the Insolvency and Bankruptcy Code. The Resolution Professional was appointed as the Liquidator to manage the liquidation process, following necessary procedures outlined by the Tribunal under Section 33(1) of the Code.

---

---

Issues: Liquidation order for Corporate Debtor Varanasi Auto Sales Limited under Insolvency and Bankruptcy Code.

Analysis:
1. Initiation of CIRP and Appointment of IRP: The CIRP for the Corporate Debtor Company was initiated based on a petition under Section 10 of the Code, appointing an Interim Resolution Professional (IRP) who was later replaced by another professional. The Tribunal affirmed the appointment of the new IRP.

2. Compliance with CIRP Progress and Expression of Interest: The Resolution Professional complied with the Insolvency and Bankruptcy Code requirements for the progress of the CIRP, including floating an Expression of Interest. However, no resolution plan was submitted within the specified timeline.

3. COA Resolutions and Liquidation Recommendation: The Committee of Creditors (COC) passed resolutions regarding the extension of CIRP if a plan was submitted and recommended liquidation in the absence of a plan, with a significant voting share in favor of liquidation.

4. Objections Raised by Prospective Resolution Applicant: A prospective Resolution Applicant raised objections regarding the rejection of their proposal, citing the lack of sharing the Information Memorandum and the voting share threshold for initiating liquidation.

5. Contentions by Liquidator: The Liquidator contended that previous applications challenging the CIRP process had been rejected by higher authorities, and with no resolution plan in place, the COC's decision for liquidation was justified.

6. Adjudicating Authority's Decision: After considering submissions and documents, the Adjudicating Authority determined that liquidation was appropriate due to the absence of a resolution plan, COC's approval for liquidation, and compliance with the Code by the Resolution Professional.

7. Appointment of Liquidator and Directions: The Adjudicating Authority appointed the Resolution Professional as the Liquidator, directing necessary notifications and public announcements for the liquidation process. The Liquidator was instructed to act in accordance with the Code and submit progress reports periodically.

8. Final Order: The Tribunal exercised its power under Section 33(1) to direct the Corporate Debtor to go into liquidation, appointing the Resolution Professional as the Liquidator and specifying the necessary procedures for the liquidation process.

In conclusion, the Tribunal's judgment ordered the liquidation of Varanasi Auto Sales Limited due to the absence of a resolution plan, COC's approval, and compliance with the Insolvency and Bankruptcy Code, appointing the Resolution Professional as the Liquidator to oversee the liquidation process.

---