Tribunal Orders Liquidation of Corporate Debtor under Insolvency Code Section, Emphasizes Compliance

The Tribunal ordered the liquidation of the Corporate Debtor under Chapter III of the Insolvency and Bankruptcy Code. The Resolution Professional's application for liquidation was treated under Section 33(1) instead of Section 33(2) due to a delay in submission. As the Resolution Professional failed to file promptly, a new Liquidator was appointed from an approved panel. The Tribunal emphasized compliance with various regulations governing the liquidation process and directed specific actions for the liquidation, including public announcements, reports filing, and management powers cessation. The application was disposed of, with relevant parties instructed to comply with the order.

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Issues:
Liquidation order under Section 33(1) or Section 33(2) of the Insolvency and Bankruptcy Code, 2016; Appointment of Liquidator; Compliance with Regulations for Liquidation Process.

Analysis:

1. Liquidation Order under Section 33(1) or Section 33(2):
The case involved an application for liquidation filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was initiated, and after the CoC's decision to liquidate the Corporate Debtor, the application was filed. However, the application was submitted after the prescribed period, leading the Tribunal to treat it under Section 33(1) instead of Section 33(2) of the Code.

2. Appointment of Liquidator:
Section 34(1) mandates that the Resolution Professional appointed for the CIRP shall act as the Liquidator upon the Adjudicating Authority's order for liquidation. In this case, the Resolution Professional had ample time to file the application for liquidation but failed to do so promptly. Due to this delay and lack of explanation, the Tribunal decided that the Resolution Professional should not continue as the Liquidator. Instead, a new Liquidator was appointed from the panel approved by the National Company Law Tribunal.

3. Compliance with Regulations for Liquidation Process:
The Tribunal referred to various regulations such as Regulation 39B, 39C, and 39D of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. These regulations deal with liquidation costs, assessment of sale as a going concern, and fees of the Liquidator. The Tribunal also highlighted the importance of complying with Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, regarding the publication of public announcements and the submission of claims by stakeholders.

In conclusion, the Tribunal directed the liquidation of the Corporate Debtor in accordance with Chapter III of the Code, appointed a new Liquidator, and outlined specific directions for the liquidation process, including the publication of public announcements, filing of reports, and cessation of powers of the Corporate Debtor's management. The application was disposed of, and necessary copies of the order were directed to be supplied to relevant parties for compliance.

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