Legal Order: Liquidation Proceedings Issued for Corporate Debtor

The application for liquidation proceedings under the Insolvency and Bankruptcy Code was disposed of, resulting in the issuance of a liquidation order for the Corporate Debtor. Mr. Hansraj Mutreja was appointed as the Liquidator with fixed fees. The Committee of Creditors approved the estimated liquidation cost and resolved to explore selling the Corporate Debtor as a going concern. The Tribunal provided specific directions for the liquidation process, emphasizing compliance with the IBC and related regulations. The order instructed no new legal proceedings without approval, transfer of powers to the Liquidator, cooperation from Corporate Debtor personnel, and timely reporting requirements.

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Issues Involved:
1. Initiation of Liquidation Proceedings
2. Compliance with Procedural Timelines
3. Appointment and Fees of Liquidator
4. Liquidation Cost and Sale as a Going Concern
5. Directions for Liquidation Process

Issue-wise Detailed Analysis:

1. Initiation of Liquidation Proceedings:
The application IA No. 228/JPR/2020 was filed by the Resolution Professional (RP) for M/s. Kishorilal Sudesh Kumar Metals Private Limited under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC) for initiating liquidation proceedings. The Adjudicating Authority had previously admitted the application under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) and appointed Mr. Hansraj Mutreja as the Interim Resolution Professional (IRP).

2. Compliance with Procedural Timelines:
The IRP constituted the Committee of Creditors (CoC), which resolved to appoint the IRP as the RP. During the 3rd CoC meeting, it was decided to liquidate the Corporate Debtor due to its non-operational status for over 19 years and lack of assets. The application for liquidation was filed on 21.08.2020, considering the exclusion of the lockdown period due to COVID-19 as per the National Company Law Appellate Tribunal (NCLAT) and Insolvency and Bankruptcy Board of India (IBBI) notifications.

3. Appointment and Fees of Liquidator:
Section 34(1) of the Code mandates that the RP shall act as the Liquidator upon submission of written consent unless replaced. The CoC resolved to appoint Mr. Hansraj Mutreja as the Liquidator, who met the eligibility criteria and had submitted his consent. The Liquidator's consolidated fees were fixed at Rs. 2,00,000/- plus actual expenses.

4. Liquidation Cost and Sale as a Going Concern:
Regulation 39B of CIRP Regulations, 2016 was discussed, and the liquidation cost was estimated at Rs. 6,00,000/-. The CoC approved this with 69.69% voting rights. Regulation 39C was also considered, and the CoC resolved to sell the Corporate Debtor as a going concern as the first option, or its business as a going concern as the second option, before exploring other sale options.

5. Directions for Liquidation Process:
The Tribunal directed the liquidation of M/s. Kishori Lal Sudesh Kumar Metals Private Limited under Chapter III of the Code. Key directions included:
- No suit or legal proceedings shall be instituted by or against the Corporate Debtor without prior approval.
- The liquidation order serves as a notice of discharge to officers, employees, and workmen, except when the business continues during liquidation.
- All powers of the Board of Directors and key personnel cease and vest in the Liquidator.
- The personnel of the Corporate Debtor must cooperate with the Liquidator.
- The Liquidator must publish a public announcement within five days and file a preliminary report within 75 days, followed by regular progress reports.

Conclusion:
The application IA No. 228/JPR/2020 was disposed of, and the order for liquidation was issued with specific directions to ensure compliance with the IBC and related regulations. The Registry was instructed to send a copy of the order to the Liquidator and the Registrar of Companies.

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