2022 (1) TMI 513 - Tri - Insolvency and Bankruptcy

Corporate Debtor M/s. Sainsons Pulp & Papers Limited Ordered for Liquidation Under Insolvency & Bankruptcy Code

The Tribunal ordered the liquidation of the Corporate Debtor, M/s. Sainsons Pulp and Papers Limited, in accordance with Chapter III of the Insolvency ... Liquidation of Corporate Debtor - Section 33(2) of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- In the present case, the Resolution Professional has published the Form G inviting the Expression of Interest (EOI) on 03.09.2020. Thereafter, few prospective Resolution Applicants have come forward showing their interest. However, both of the PRA(s) have withdrawn their EOI before submission of resolution plans. In the 7th meeting of CoC held on 30.12.2020, the CoC has decided to liquidate the Corporate Debtor by passing a resolution in the aforesaid meeting and further resolved to appoint Resolution Professional as Liquidator. In view of the satisfaction of the conditions provided under Section 33 of the Code, the Corporate Debtor i.e. M/s. Sainsons Pulp and Papers Limited is directed to be liquidated in the manner as laid down in Chapter III of the Code. The Corporate debtor is liquidated with immediate effect in the manner provided under Chapter III Part II of the IBC 2016 - Application allowed. Issues:1. Liquidation of Corporate Debtor under Section 33(2) of the Insolvency & Bankruptcy Code, 2016.Analysis:The Tribunal, in this case, dealt with the application filed by the Resolution Professional seeking to liquidate the Corporate Debtor under Section 33(2) of the Insolvency & Bankruptcy Code, 2016. The Corporate Debtor had initiated the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the IBC, which was admitted by the Tribunal. The Committee of Creditors (CoC) was constituted, and subsequent developments led to the replacement of the Interim Resolution Professional (IRP) with a Resolution Professional. Various meetings of the CoC were held to discuss matters such as valuation, Expression of Interest (EOI), and ultimately, the decision to liquidate the Corporate Debtor was taken in the seventh meeting of the CoC on 30.12.2020. The Tribunal examined the provisions of Section 33(2) of the IBC, which outline the circumstances under which a liquidation order can be passed by the Adjudicating Authority.The Tribunal noted that the Resolution Professional had published Form G to invite Expression of Interest (EOI), but the prospective Resolution Applicants who showed interest later withdrew their EOIs before submitting resolution plans. Consequently, the CoC decided to liquidate the Corporate Debtor in the seventh meeting held on 30.12.2020. The Tribunal thoroughly considered the submissions made by the Resolution Professional and reviewed the records before reaching a decision.In the seventh meeting of the CoC, it was resolved to appoint the Resolution Professional as the Liquidator, specifying the fees, responsibilities, and the estimated liquidation cost. The Tribunal, satisfied with the conditions under Section 33 of the IBC, directed the liquidation of the Corporate Debtor, M/s. Sainsons Pulp and Papers Limited, in accordance with Chapter III of the Code. The order included the appointment of the Liquidator, transfer of assets' custody, commencement of the liquidation process, submission of reports, legal actions for recovery, cessation of powers of the Board of Directors, and cooperation requirements from the Corporate Debtor's personnel.The Tribunal's order encompassed various directives related to the liquidation process, including the initiation of moratorium, discharge notices, reporting obligations, communication with relevant authorities, and provisions for seeking directions during the liquidation process. The Tribunal disposed of the application, thereby finalizing the decision to liquidate the Corporate Debtor and appointing the Resolution Professional as the Liquidator.