2022 (9) TMI 541 - Tri - Insolvency and Bankruptcy

Tribunal Approves Liquidation of Shree Ganesh Stampings Pvt Ltd: Resolution Plan Rejected

The Tribunal approved the liquidation of Shree Ganesh Stampings Private Limited, following the rejection of the Resolution Plan and the CoC's decision for ... Liquidation of Corporate Debtor - Section 33(1) (a) and 34(1) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is observed from the minutes of the 6th CoC meeting dated 12.03.2021 that the COC has, with 100% majority, decided to liquidate the Corporate Debtor and relying on the settled principle of law regarding the Commercial Wisdom of the COC. That the Corporate Debtor to be liquidated in the manner as laid down in the Chapter by issuing Public Notice stating that the Corporate Debtor is in liquidation with a direction to the Liquidator to send this order to the ROC under which this Company has been registered - this liquidation order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor except to the extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator - application disposed off. Seeking change of Resolution Professional as Liquidator - Section 60(5) of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Bench is therefore of the considered view that the provisions of Section 34(4) are mandatory in nature and if not complied with, another Liquidator cannot be appointed. Hence, the Resolution Professional in the matter has to be appointed as Liquidator in liquidation process as the COC in its meeting has given no reasons in writing for the replacement of a resolution professional as required by Section 34(4)(b) - Application disposed off. Issues:1. Liquidation of Shree Ganesh Stampings Private Limited under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016.2. Application for change of Resolution Professional as Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.Issue 1: Liquidation of Shree Ganesh Stampings Private LimitedThe Tribunal considered an application filed by the Resolution Professional seeking the liquidation of Shree Ganesh Stampings Private Limited under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the Resolution Professional was appointed as the Interim Resolution Professional. The Committee of Creditors (CoC) decided to liquidate the Corporate Debtor in a meeting with 100% voting in favor of liquidation. The Resolution Plan submitted by a Promoter was rejected, leading to the decision for liquidation. The Tribunal, relying on the commercial wisdom of the CoC, approved the liquidation and appointed the Resolution Professional as the Liquidator. The Liquidator was granted powers as per the Code and directed to follow the liquidation process regulations. The Tribunal allowed the application for liquidation and appointed the Resolution Professional as the Liquidator.Issue 2: Application for Change of Resolution Professional as LiquidatorAnother application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking a change of the Resolution Professional as the Liquidator. The Applicant raised concerns about the satisfactory completion of the Corporate Insolvency Resolution Process and requested the appointment of a new Liquidator. The Resolution Professional did not object to the appointment of another person as Liquidator. However, the Tribunal found that the provisions of Section 34(4) were mandatory, and as the CoC did not provide reasons in writing for the replacement of the Resolution Professional, another Liquidator could not be appointed. Consequently, the application for a change of Liquidator was rejected by the Tribunal.This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal concerning the liquidation of Shree Ganesh Stampings Private Limited and the application for changing the Resolution Professional as the Liquidator. The Tribunal's decisions were based on the provisions of the Insolvency and Bankruptcy Code, 2016, and the actions taken by the CoC in the respective matters.