2021 (11) TMI 948 - Tri - Insolvency and Bankruptcy

Tribunal Approves Liquidation Proposal for Indian Roots Shopping Limited

AS Technosoft Private Limited Versus Indianroots Shopping Limited

The Tribunal approved the liquidation proposal for the corporate debtor, Indian Roots Shopping Limited, due to non-cooperation, lack of financial ... Seeking liquidation of the corporate debtor - Section 33(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The CIRP of 180 days in the present matter originally estimated for closure on 07.09.2019 but the exclusion period of 150 days was granted by the bench. Further, the extension of 150 days was granted by this bench on 10.12.2019, completing 330 days of CIRP. Because of non-cooperation of the Corporate Debtor and its directors, it is seen from the provisions of IBC, 2016 is to seek the liquidation as provided under the provisions of section 33 of IBC, 2016. Taking into consideration the provisions of law as well as the facts on record, the liquidation of the corporate debtor is ordered and in the circumstances the corporate debtor stands liquidated and the incidence of liquidation to follow, on and from the date of this order in terms of the provisions of IBC, 2016 and more particularly as given in Chapter-III of IBC, 2016 and also in terms of Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017. Application allowed. Issues:Application for liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 - Non-cooperation of the Corporate Debtor and its directors - Approval of liquidation proposal by the Committee of Creditors - Appointment of Liquidator - Determination of liquidation costs - Invitation of Expression of Interest (EOI) - Ratification of expenses incurred by the Resolution Professional - Liquidation order and directions.Analysis:The application was filed by the Resolution Professional (RP) under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the liquidation of the corporate debtor, Indian Roots Shopping Limited. The RP highlighted the non-cooperation of the Corporate Debtor and its directors, lack of handover of essential documents, and assets, which hindered the resolution process. The RP, with the approval of the Committee of Creditors (CoC), moved for liquidation due to various reasons, including non-compliance, lack of financial resources, and unavailability of necessary information and assets.The CoC approved the liquidation proposal unanimously, leading to the decision to liquidate the corporate debtor under Section 33(2) of the Code. The RP informed the CoC about the liquidator fees, liquidation costs, and the need to invite Expression of Interest (EOI), which was rejected by the majority of members present and voting. The expenses incurred by the RP were also discussed and ratified by the CoC.Due to the prolonged Corporate Insolvency Resolution Process (CIRP) exceeding 287 days, and the continued non-cooperation, the Tribunal ordered the liquidation of the corporate debtor. The RP was appointed as the liquidator, and various directions were issued, including the issuance of a Public Announcement, communication to regulatory authorities, cessation of the Moratorium, and submission of a Preliminary Report within a specified timeline. The order also served as a notice of discharge to the officers, employees, and workmen of the corporate debtor.The Tribunal directed the Liquidator to proceed with the liquidation process in accordance with the relevant regulations and submit necessary reports within the specified timelines. The order was communicated to the operational creditor, corporate debtor, and the Liquidator for further action, with compliance reports to be submitted to the Registrar, NCLT. The Tribunal also disposed of the relevant application in line with the liquidation order.