2022 (1) TMI 568 - Tri - Insolvency and Bankruptcy

Tribunal Orders Liquidation of Corporate Debtor Due to Non-Receipt of Resolution Plan

The Tribunal ordered the liquidation of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, due to the non-receipt of a ... Liquidation of the Corporate Debtor - non-receipt of resolution plan - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It would appear that despite all possible steps as required under the Code taken during the CIRP. The CoC in its wisdom has resolved in favour of the liquidation of the Company. This Authority has no reason before it to take a contrary view in terms of Section 33(2) of the Code. Therefore, there are no option than to pass an order of liquidation of the Company in the manner laid down in Chapter-Ill of the Code. The Corporate Debtor i.e., M/s. Tejaswini Engineering Private limited shall be liquidated in the manner laid down in Chapter-Ill of the Code - Application allowed. Issues:1. Liquidation application under Section 33(2) of the Insolvency and Bankruptcy Code, 2016.2. Replacement of Interim Resolution Professional (IRP) with Resolution Professional.3. Valuation of financial assets and decision-making by Committee of Creditors (COC).4. Liquidation process and appointment of Liquidator.5. Compliance with regulations and duties during liquidation.Analysis:1. The application was filed by the Resolution Professional of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, seeking liquidation due to non-receipt of a resolution plan. The Tribunal noted the legislative mandate to initiate liquidation under such circumstances.2. The Insolvency Petition was initially filed by the Financial Creditor, leading to the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Tribunal appointed an Interim Resolution Professional (IRP) who was later replaced by a Resolution Professional based on the decision of the Committee of Creditors (COC).3. During the COC meetings, discussions were held regarding the valuation of financial assets of the Corporate Debtor. It was revealed that the liquidation value of the financial assets was zero, leading the COC members to decide in favor of liquidating the Corporate Debtor. The Resolution Professional was directed to file the necessary application for liquidation.4. The Tribunal, in line with the decision of the COC and the legislative framework, ordered the liquidation of the Corporate Debtor. A specific Liquidator was appointed, and various directions were issued regarding the liquidation process, including the cessation of powers of the Board of Directors and the vesting of powers in the Liquidator.5. The Tribunal emphasized compliance with the regulations and duties during the liquidation process as per the provisions of the Insolvency and Bankruptcy Code and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator was entrusted with specific powers and duties, and personnel connected with the Corporate Debtor were directed to provide necessary assistance.This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the liquidation application, replacement of IRP, decision-making by COC, the appointment of Liquidator, and compliance with regulations during the liquidation process.