Tribunal Orders Liquidation of Corporate Debtor: Implications of IBC Section 33 The Tribunal ordered the liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016, following the failure of ...
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Tribunal Orders Liquidation of Corporate Debtor: Implications of IBC Section 33
The Tribunal ordered the liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016, following the failure of multiple Resolution Plans and the CoC's decision for liquidation. Mr. K. Sivalingam was appointed as the Liquidator with specific remuneration terms. The Liquidator was directed to adhere strictly to the IBC provisions, investigate financial affairs, issue public announcements, and communicate with regulatory authorities. The order specified the cessation of the previous Moratorium and initiation of a fresh one under Section 33(5) of the IBC, outlining procedures and timelines for the liquidation process.
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.
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