2021 (7) TMI 567 - Tri - Insolvency and Bankruptcy

Corporate Debtor Liquidation Order Issued Under IBC Section 33(1)(b)

In Re : Anju Agarwal, RP of Shree Bhawani Paper Mills Ltd.

The Adjudicating Authority ordered the liquidation of the Corporate Debtor under Section 33(1)(b) of the Insolvency and Bankruptcy Code after the ... Seeking Liquidation of Corporate Debtor - also seeking appointment of liquidator - Section 33 and 34 of the Insolvency & Bankruptcy Code - HELD THAT:- Upon going through the contents of the present Liquidation application and the provisions contained in the Code this Adjudicating Authority is of the view that as Sec. 33(1) of IBC, 2016 contemplates that this Tribunal can pass an order of liquidation of the corporate debtor, if the maximum period permitted for the completion of the CIRP is over and in the present matter more than 1000 days has passes since initiation of CIKP and as by operation of Sec. 33(1) IBC, the corporate debtor is necessarily required to be ordered for the liquidation under Sec. 33(1)(b) of the IBC, 2016 - even COC in its 18th meeting held on 04.01.2020 has with 95.29% majority has passed the resolution to liquidate the Corporate Debtor as no resolution plan was received for revival of the company and even the latest valuation of the assets have not attracted any resolution plan and further the commercial wisdom of the COC cannot be challenged which has approved the resolution for liquidation of the company. This Adjudicating Authority hereby directs that the Corporate Debtor i.e. Shree Bhawani Paper Mills Ltd. shall go into Liquidation and the moratorium declared for the Corporate Debtor under Liquidation shall cease to have effect from pronouncement of this Order - Resolution Professional Ms. Anju Agarwal is appointed to act as liquidator - application allowed. Issues: Liquidation of Corporate Debtor, Fresh Valuation of Assets, Appointment of LiquidatorLiquidation of Corporate Debtor:The application was filed under Section 33(1)(a) of the Insolvency and Bankruptcy Code seeking the liquidation of the Corporate Debtor Company. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and despite efforts to revive the company, including the submission and consideration of resolution plans, the Committee of Creditors (CoC) ultimately decided to liquidate the company. The CoC, with a 95.29% majority, approved the resolution for liquidation as no viable resolution plan was received within the stipulated timeline. The Adjudicating Authority, considering the prolonged CIRP period and the commercial wisdom of the CoC, ordered the Corporate Debtor to go into liquidation under Section 33(1)(b) of the IBC.Fresh Valuation of Assets:A proposal was made to conduct a fresh valuation of the assets of the Corporate Debtor to determine their current market value due to economic slowdown and adverse market conditions. The CoC was urged to consider the importance of updated asset valuation for making informed decisions regarding the resolution process. The Adjudicating Authority directed the CoC to conduct a fresh valuation, which was subsequently carried out by registered valuers. The valuation report indicated the liquidation value of the assets on a going concern basis and piecemeal basis, leading to further discussions within the CoC.Appointment of Liquidator:Following the decision to proceed with the valuation and in light of the extended CIRP period, the CoC directed the Liquidator to file an application before the Adjudicating Authority. The Adjudicating Authority, after reviewing the circumstances and powers under Section 33(1) of the IBC, ordered the appointment of the Resolution Professional as the Liquidator for the Corporate Debtor. The Liquidator was tasked with sending notifications to relevant authorities, making public announcements, and adhering to the provisions of the IBC while filing progress reports periodically.This comprehensive analysis highlights the key aspects of the judgment, including the liquidation process, asset valuation considerations, and the appointment of the Liquidator, as decided by the Adjudicating Authority in response to the application filed under the Insolvency and Bankruptcy Code.