https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=388437 https://www.taxtmi.com/caselaws?id=388437 Liquidation order - liquidation of Corporate Debtor - section 33 of Insolvency Bankruptcy Code, 2016 - HELD THAT:- It is seen that the RP has filed an application for Liquidation of the Corporate Debtor as the CoC has rejected the Resolution Plan submitted by Taguda with 77.61% voting share against the above mentioned resolution plan. This decision of CoC is being challenged by (i) Lodha (one of the Financial creditor of the Corporate Debtor having 1.03% share in CoC), (ii) the Promoters of the Corporate Debtor, (iii) the employees of the Corporate Debtor and the (iv) Resolution Applicant itself. The objection raised is regarding the justification of the alleged commercial wisdom claimed to be exercised by the CoC. Canara Bank is supporting the decision of CoC for liquidation as it has given its own reasons for rejection of Resolution Plan. Having a supervisory jurisdiction over the CIRP proceedings it is desirable to examine whether due procedure of law has been followed or not. Under supervisory jurisdiction the job of the Adjudicating Authority is not merely a stamping authority to approve each and every decision of the CoC, but to test decision on three parameters i.e. (i) it s feasibility, (ii) it s viability , and (iii) it s effective implementation. If no Viability and no feasibility is demonstrated by CoC , then automatically such a decision is flawed one, as happened in this case. There was no sensible examination of facts figures by CoC, rather a senseless decision of liquidation was adopted - Liquidation has to be a last resort , that too in Public interest which ought to be fair and just, only in the absence of a Resolution Plan. Therefore the decision of CoC, which is adversely effecting so many lives, be based upon common judicious prudence coupled with commercial viability, and lack of these criteria is nothing but a bad exercise of a non-commercial decision. Recovery of existing receivables - HELD THAT:- Any cash recoveries made by the Resolution Applicant and/or the Company after the expiry of 3 years from the Transfer Date (including cash recoveries from the Existing Receivables) shall be retained by the Company and shall be available for use at its discretion at all times including to pay such amounts to the Resolution Applicant. In order to make recoveries from the Existing Receivables, the Company shall be entitled to execute power of attorney in favour of the Resolution Applicant in the form proposed by the Resolution Applicant - All cash recoveries and costs and expenses shall be routed through a separate bank account opened by the Company with any of the scheduled bank who is a part of the Financial Creditors; however, it is clarified that the Financial Creditors shall not have any lien or charge, including bankers lien, on such bank account. The Resolution Plan is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under section 14 of I B Code shall not have any effect henceforth. The Resolution Professional shall submit the records collected during the commencement of the Proceedings to the Insolvency Bankruptcy Board of India for their record and also return to the Resolution Applicant or New Promoters. Certified copy of this Order be issued on demand to the concerned parties, upon due compliance. The Resolution Professional is further directed to handover all records, premises/factories/documents to Resolution Applicant to finalise the further line of action required for starting of the operation. The Resolution Applicant shall have access to all the records/premises/factories/documents through Resolution Professional to finalise the further line of action required for starting of the operation. Application for liquidation is hereby rejected. Case-Laws Insolvency and Bankruptcy Thu, 07 Nov 2019 00:00:00 +0530