Tribunal Orders Liquidation of Nesa India Producer Limited Under IBC Section 33:

The Tribunal ruled that the Corporate Insolvency Resolution Process (CIRP) of Nesa India Producer Limited could not be terminated once initiated under the Insolvency and Bankruptcy Code. Due to non-cooperation and non-submission of claims by creditors, including the Operational Creditor, and the non-constitution of the Committee of Creditors (CoC), the Tribunal ordered the liquidation of the Corporate Debtor under Section 33(1)(a) of the IBC. The liquidator was directed to take control of assets, and a fresh moratorium under Section 33(5) commenced. The matter was listed for the appointment of a Liquidator on 31.01.2022.

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Issues Involved:
1. Termination of Corporate Insolvency Resolution Process (CIRP).
2. Non-cooperation and non-submission of claims by the Operational Creditor and other creditors.
3. Non-constitution of the Committee of Creditors (CoC).
4. Liquidation of the Corporate Debtor.

Issue-wise Detailed Analysis:

1. Termination of Corporate Insolvency Resolution Process (CIRP):
The application was filed under Rule 11 of the National Company Law Tribunal Rules, 2016 by the Interim Resolution Professional (IRP) for terminating the CIRP of Nesa India Producer Limited, discharging the IRP, and reimbursing the expenses incurred on the CIRP. The Tribunal noted that the CIRP was initiated on 25th November 2019, and the application for termination was filed on 20th February 2021, more than one year after the initiation. The Tribunal emphasized that there is no provision under the Insolvency and Bankruptcy Code (IBC) to terminate the CIRP once initiated; the only way is to either complete the CIRP by approval of a resolution plan or pass a liquidation order under Section 33 of the IBC.

2. Non-cooperation and non-submission of claims by the Operational Creditor and other creditors:
The IRP had made several attempts to communicate with the directors of the suspended Board of the Corporate Debtor and the Operational Creditor, Mr. Sunil Kumar, but received no cooperation. Despite public announcements and follow-ups, no claims were received from any creditors, including the Operational Creditor. The IRP faced significant difficulties due to the lack of requisite information and documents, and the Operational Creditor did not deposit the sum of Rs. 2 lakhs as directed by the Tribunal for meeting the immediate expenses of the CIRP.

3. Non-constitution of the Committee of Creditors (CoC):
Due to the non-receipt of any claims, the IRP could not constitute the CoC even after the expiry of 365 days from the date of initiation of the CIRP. Without the CoC, the IRP could not proceed with the resolution process, and no resolution plan was received.

4. Liquidation of the Corporate Debtor:
The Tribunal referred to Section 33 of the IBC, which provides for the initiation of liquidation under certain circumstances. Since no resolution plan was received, and the CoC was not constituted, the Tribunal decided to pass a liquidation order under Section 33(1)(a) of the IBC. The Tribunal ordered the liquidation of the Corporate Debtor with immediate effect and directed the liquidator to take custody and control of the assets and property of the Corporate Debtor. A public announcement was to be made, and the provisions of Section 33(5), (6), and (7) of the IBC were to come into force immediately. The order of moratorium under Section 14 of the IBC ceased to have effect, and a fresh moratorium under Section 33(5) commenced. The Tribunal also directed the Registry to communicate the order to the Operational Creditor, the Corporate Debtor, the Registrar of Companies (RoC), and the Insolvency and Bankruptcy Board of India (IBBI). Since the IRP did not consent to work as the Liquidator, the matter was listed for the appointment of a Liquidator on 31.01.2022.

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