2022 (12) TMI 369 - AT - Insolvency and Bankruptcy

Dismissal of Appeals Challenging Liquidation Order under Insolvency Code

SHAILAJA VAIBHAV PATIL, VIKAS SURESH MALEKAR Versus CMA HARSHAD S. DESHPANDE, M/s SILVEROAKS COMMERCIALS LIMITED, NASHIK MERCHANT CO-OPERATIVE BANK LIMITED, CITY CO-OPERATIVE CREDIT AND CAPITAL LIMITED, MR. P.L. ADKE, GALACTICO CORPORATE SERVICES LIMITED

SHAILAJA VAIBHAV PATIL, VIKAS SURESH MALEKAR Versus CMA HARSHAD S. DESHPANDE, M/s SILVEROAKS COMMERCIALS LIMITED, NASHIK MERCHANT CO-OPERATIVE BANK ... Issues:- Appeal against the order allowing liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016.- Dispute over the resolution plan submitted by prospective resolution applicants.- Request to set aside the order of liquidation and remand the matter back to the Committee of Creditors.- Applicability of Rule 11 of the NCLAT Rules, 2016 in the absence of specific provisions in the Code.Analysis:1. The judgment addresses a batch of three appeals filed against the same impugned order allowing liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016. The appeals were filed by various parties, including a secured financial creditor, a resolution applicant, and an ex-director of the Corporate Debtor. The facts of the case were primarily taken from one of the appeals for convenience.2. The application under Section 9 of the Code was initially filed by an Operational Creditor against the Corporate Debtor, leading to the appointment of an Interim Resolution Professional (IRP) and subsequently a Resolution Professional (RP). After receiving expressions of interest (EOI) from various entities, including CoC members and prospective resolution applicants, the CoC ultimately passed a resolution for the liquidation of the Corporate Debtor in a meeting held on 21.01.2020.3. Following the resolution, the RP filed an application under Section 33 of the Code seeking liquidation of the Corporate Debtor and the appointment of a liquidator, which was approved by the Adjudicating Authority. The appeals challenged this order, with one of the appellants arguing for setting aside the liquidation order and reconsideration of a resolution plan submitted by another party.4. The key argument in the appeals was whether the Tribunal had the authority to set aside the order of liquidation and refer the matter back to the CoC for reconsideration of a resolution plan. The appellant relied on previous decisions to support their position, while the respondent contended that the Code did not provide for such a power.5. The Tribunal examined the arguments presented by both parties and noted that while there was no specific provision in the Code for the situation at hand, the appellant invoked Rule 11 of the NCLAT Rules, 2016, which provides inherent powers. However, the Tribunal found that the Code is self-contained, and the circumstances did not warrant the application of Rule 11.6. Ultimately, the Tribunal concluded that none of the arguments presented by the appellants were convincing enough to set aside the impugned order and revert the decision to the CoC. The Tribunal emphasized that the Code's completeness and lack of provisions for such situations precluded the application of Rule 11, leading to the dismissal of all three appeals.7. In conclusion, the Tribunal dismissed the appeals, stating that the arguments lacked merit and did not justify setting aside the order of liquidation. No costs were awarded in the judgment.