2022 (6) TMI 6 - Tri - Insolvency and Bankruptcy

Liquidator authorized to distribute assets to stakeholders under Insolvency & Bankruptcy Code

The Tribunal allowed the Liquidator to distribute the assets/proceeds of sale to stakeholders following regulations and timelines under the Insolvency and ... Seeking direction to Registrar, NCLT Kochi to take necessary steps in relation with the pending appeals filed under Section 42 of the Code which are served upon the Liquidator but not yet listed before this Bench - seeking commencement of distribution of assets/proceeds of sale as per Section 53 read with Regulation 42 Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- As far as the 1st prayer of the Applicant to direct the Registry of this Tribunal to take necessary steps in relation to the pending appeals filed under Section 42 of the Code which is served upon the Liquidator but not yet listed before this Bench is concerned on verification of the records of this Registry, it is seen that the appeals stated to have been filed by the workmen have been returned to them being defective and that they have not re-presented them till date. Hence, there are no appeals pending consideration by this Tribunal. As regards the 2nd prayer to direct/permit commencement of distribution of assets/proceeds of sale as per Section 53 read with Regulation 42 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is concerned, it is seen that the Hon'ble High Court while dismissing the OP(C) 484/2020 precluded the Applicant from the disbursement of any amount to any of the creditors of the Corporate Debtor till the time the pending appeals filed under Section 42 by the workmen/employees before this Tribunal were disposed of. Since all the appeals filed by the workmen/employees were dismissed by this Tribunal for the reasons stated therein, there is no bar in granting the prayer of the Applicant for commencement of distribution of assets/proceeds of sale as per Section 53 of IBC, 2016 read with Regulation 42 of IBBI (Liquidation Process) Regulations, 2016. The Applicant/Liquidator is permitted to proceed with the distribution of assets/proceeds of sale to the stakeholders on receipt of this order - application disposed off. Issues:1. Liquidator seeking reliefs under Section 60(5) and Rules 11 and 28 of NCLT Rules, 2016.2. Pending appeals under Section 42 of the Code not listed before the Tribunal.3. Commencement of distribution of assets/proceeds of sale under Section 53 read with Regulation 42 of IBBI (Liquidation Process) Regulations, 2016.Analysis:1. The Liquidator of a company filed an application seeking reliefs under Section 60(5) and Rules 11 and 28 of NCLT Rules, 2016. The reliefs included directing the Registry to take necessary steps regarding pending appeals under Section 42 of the Code and permitting the commencement of distribution of assets/proceeds of sale as per Section 53 read with Regulation 42 of IBBI (Liquidation Process) Regulations, 2016.2. The Tribunal noted that numerous appeals had been filed by workmen under Section 42 of the IBC, 2016. Despite the dismissal of all Section 42 appeals by the Tribunal, some appeals were pending for listing. The Hon'ble High Court had previously restrained the Liquidator from disbursing proceeds of liquidation until these appeals were heard and disposed of. However, since all appeals by workmen were dismissed except those pending listing, the Tribunal allowed the Liquidator to distribute the proceeds of liquidation to the stakeholders of the Corporate Debtor.3. After considering the arguments presented by the Applicant/Liquidator and reviewing relevant documents, the Tribunal found that the appeals filed by workmen were defective and had not been re-presented. As a result, there were no pending appeals for consideration. Regarding the commencement of distribution of assets/proceeds of sale, the Tribunal permitted the Liquidator to proceed with the distribution in accordance with Section 53 of the IBC, 2016 read with Regulation 42 of IBBI (Liquidation Process) Regulations, 2016. The order emphasized that the distribution should strictly adhere to the provisions of the regulations.In conclusion, the Tribunal disposed of the application, allowing the Liquidator to distribute the assets/proceeds of sale to the stakeholders following the prescribed regulations and timelines under the Insolvency and Bankruptcy Code, 2016.