Tribunal orders liquidation post creditor approval, grants powers to Liquidator

The tribunal passed a liquidation order for the Corporate Debtor, appointing the Resolution Professional as the Company Liquidator. This decision followed multiple Committee of Creditors meetings where a resolution for liquidation was approved with a significant majority vote. The order included the cessation of the moratorium, transfer of powers to the Liquidator, and authorization for the Liquidator to charge fees for conducting the proceedings. The judgment highlighted the impact of the COVID-19 pandemic on the insolvency resolution process and allowed the initiation of liquidation proceedings against the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.

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Issues:
Liquidation order for Corporate Debtor under IBC, 2016.

Detailed Analysis:
The judgment pertains to an application filed under Section 33 of the Insolvency and Bankruptcy Code, 2016, seeking a liquidation order for a Corporate Debtor named M/s. Growthways Trading Private Limited. The Corporate Debtor had initiated the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the IBC, 2016, and an Interim Resolution Professional (IRP) was appointed. The IRP took over the management of the Corporate Debtor and invited claims from creditors. The Committee of Creditors (COC) was formed with financial and operational creditors. Various meetings were held, including the appointment of registered valuers, preparation of Information Memorandum, issuance of Expression of Interest (EOI), and appointment of transaction auditors.

The Resolution Professional did not receive any resolution plan from prospective resolution applicants due to the COVID-19 outbreak and subsequent lockdown. The COC sought an extension of the CIRP period due to the pandemic, which was allowed by the tribunal. Subsequently, the IRP was appointed as the Resolution Professional, and various steps were taken, including physical verification of inventory and appointment of legal advisors/consultants for debt collection. Despite these efforts, no positive response was received.

After multiple COC meetings, a resolution for liquidation of the Corporate Debtor was approved with a significant majority vote. The estimated costs of liquidation were considered and approved in subsequent meetings. The COC also approved an extension of the CIRP period due to the COVID-19 lockdown. Eventually, in the 11th COC meeting, a resolution for liquidation was passed with 100% vote, and the RP was appointed as the liquidator.

The tribunal, considering the facts and circumstances, proceeded to pass a liquidation order for the Corporate Debtor. The order included the appointment of the RP as the Company Liquidator, cessation of the moratorium, transfer of powers to the Liquidator, and directions for communication of the order to relevant authorities. The Liquidator was authorized to charge fees for conducting the liquidation proceedings as per regulations. The judgment allowed the initiation of liquidation proceedings against the Corporate Debtor as per Section 33(2) of the IBC, 2016.

In conclusion, the judgment extensively details the procedural history leading to the liquidation order for the Corporate Debtor, emphasizing the impact of the COVID-19 pandemic on the insolvency resolution process and the subsequent decision for liquidation.

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