Tribunal Orders Liquidation of Inactive Company The Tribunal ordered the liquidation of a Corporate Debtor, Mayur Manpower Services Private Limited, due to its inactivity for three years. The Resolution ...
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The Tribunal ordered the liquidation of a Corporate Debtor, Mayur Manpower Services Private Limited, due to its inactivity for three years. The Resolution Professional was appointed as the Liquidator to manage the liquidation process, including taking over the powers of the Board of Directors. Legal proceedings against the Corporate Debtor were restricted during liquidation, with the Liquidator empowered to act on its behalf. The liquidation order discharged the Corporate Debtor's officers, employees, and workmen, except for ongoing business activities under the Liquidator's management. The Liquidator was directed to file the order for compliance and dissemination, with monitoring scheduled for progress.
Issues: Application for liquidation of a corporate debtor not carrying on business for three years. Appointment of liquidator.
Analysis: 1. The Tribunal received an application from the Resolution Professional, acting on the instructions of the Committee of Creditors (CoC), seeking liquidation of a Corporate Applicant, Mayur Manpower Services Private Limited, due to its inactivity for the past three years.
2. The Adjudicating Authority had earlier directed the initiation of Corporate Insolvency Resolution Process (CIRP) for the Corporate Applicant and appointed an Interim Resolution Professional.
3. The CoC, comprising one Financial Creditor, decided to appoint a Resolution Professional to initiate liquidation proceedings as the Corporate Debtor had ceased business operations, faced financial challenges, and had significant liabilities exceeding assets.
4. The Resolution Professional agreed to act as the Liquidator, as required under the Insolvency and Bankruptcy Code, and filed an application for liquidation after the CIRP period expired.
5. The Tribunal, after considering submissions, ordered the liquidation of the Corporate Debtor and appointed the Resolution Professional as the Liquidator, in line with the Code's provisions.
6. The Liquidator was tasked with managing the liquidation process, issuing public notices, taking over the powers of the Board of Directors, and ensuring cooperation from the Corporate Debtor's personnel.
7. Legal proceedings against the Corporate Debtor were restricted during liquidation, with the Liquidator empowered to act on behalf of the Corporate Debtor with prior approval from the Adjudicating Authority.
8. The liquidation order served as a discharge notice to the Corporate Debtor's officers, employees, and workmen, except for ongoing business activities managed by the Liquidator.
9. The Liquidator was directed to file the order with the Registrar of Companies and the Registry for compliance and dissemination, while the application for liquidation was disposed of as per the Tribunal's directions.
10. The Registry was instructed to inform all relevant parties and issue certified copies of the order, with a follow-up hearing scheduled to monitor progress on the matter.
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