2022 (10) TMI 429 - Tri - Insolvency and Bankruptcy

Tribunal Orders Liquidation of Corporate Debtor: Implications of IBC Section 33

In Re : Amier Hamsa Ali Abbas Rawther, RP of Cauvery Power Generation Private Limited

The Tribunal ordered the liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016, following the failure of ... Liquidation of Corporate Debtor - Section 33(2) of the IBC - HELD THAT:- Upon perusal of the Application, it is seen that the RP has conducted a total of 42 CoC meetings. It is also seen that on 23.07.2021, the Resolution Plan submitted by Sherisha Technologies Private Ltd. was approved by the CoC with 100% voting rights. However, the said Resolution Applicant has failed to furnish the performance guarantee and hence in the 38th CoC meeting held on 23.11.2021, the CoC has rejected the Resolution Plan of the said Resolution Applicant. It is seen that the even after issuing EoI twice, the Corporate Debtor did not garner any Resolution Plan and hence the CoC in its commercial wisdom has decided to liquidate the Corporate Debtor and also passed a Resolution to that effect in the 42nd CoC meeting held on 17.03.2022. Thus, by taking into consideration the provisions of Section 33 of IBC, 2016 and in the absence of any opposition to the Application from the Promoters of the Corporate Debtor and also guided by the decision of the Hon'ble Supreme Court in the matter of Mr. K. Sasidharan Vs. Indian Overseas Bank [2019 (2) TMI 1043 - SUPREME COURT] this Tribunal orders for the liquidation of the Corporate Debtor. Application allowed. Issues:Liquidation of the Corporate Debtor under Section 33(2) of IBC, Appointment of Liquidator, Failure of Resolution Plans, CoC's decision for liquidation, Appointment and terms of the Liquidator.Analysis:The Application filed by the Resolution Professional sought liquidation of the Corporate Debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, and various Resolution Plans were considered and rejected by the Committee of Creditors (CoC). A fresh Expression of Interest (EoI) was published, but no viable Resolution Plan was submitted within the stipulated time, leading to the CoC's unanimous decision for liquidation.The Resolution Professional conducted multiple CoC meetings, and the CoC approved a Resolution Plan earlier, which failed due to non-furnishing of performance guarantee. Subsequently, a new EoI was issued, but no Resolution Plan was submitted within the deadline. The CoC then voted for the liquidation of the Corporate Debtor in the 42nd meeting. Mr. K. Sivalingam was appointed as the Liquidator by the CoC, with specific remuneration terms.The Tribunal, after reviewing the Application and relevant provisions, ordered the liquidation of the Corporate Debtor in line with Section 33 of the IBC, 2016. The Liquidator was directed to adhere strictly to the IBC provisions, investigate financial affairs, issue public announcements, and communicate with regulatory authorities. The order also specified the cessation of the previous Moratorium and initiation of a fresh one under Section 33(5) of the IBC.The Liquidator was instructed to follow the procedures outlined in the IBC, investigate financial affairs, submit reports within specified timelines, and cooperate with relevant stakeholders. The order was to be communicated to all concerned parties for necessary actions and cooperation during the liquidation process. Ultimately, the Tribunal allowed the application with the prescribed terms and directions for the liquidation process.