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2023 (9) TMI 573
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....ion Process (CIRP) was dismissed as having become infructuous. 2. Brief facts of the case necessary to be noticed for deciding this Appeal are:- The Adjudicating Authority on an application filed by 'M/s. Toyoto Kirloskar Motors Private Limited' under Section 9 of the I&B Code passed an order dated 30.09.2019 initiating the CIRP against the Corporate Debtor- 'R.S. Motors Private Limited'. In pursuance of public announcement issued by the Interim Resolution Professional (IRP), two Financial Creditors namely- 'Tata Capital Housing Finance Limited' and 'Reliance Commercial Finance Limited' filed their claim. On the Resolution of the CoC, Form-G was also issued for invitation of Expression of Interest. An IA No. 5 of 2020 was also filed by the Appellant seeking a direction to the Resolution Professional to verify the claim made by the Financial Creditors. The CoC also appointed a Forensic Auditor to conduct forensic audit of the Corporate Debtor. The CIRP period of 270 days was coming to an end on 30.06.2020. On an Application filed by the Resolution Professional by an order dated 31.07.2020 CIRP period was extended 90 days i.e. from 01.07.2020 to 28.09.2020. On 31.08.2020, Foren....
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....ned is subject to judicial review of this Tribunal and orders have been passed without completing the necessary process in the CIRP, order deserves to be set aside. 5. Learned Counsel for the erstwhile Resolution Professional opposing the submissions of the Counsel for the Appellant submits that in reply to the notice issued by this Tribunal vide its order dated 01.11.2022, reply has been filed where detailed reply has been given regarding compliance of all orders issued by the Adjudicating Authority i.e. orders dated 26.11.2020, 18.11.2021, 17.12.2021 and 07.03.2022. It is submitted that the Resolution Professional has conducted the CIRP in accordance with relevant CIRP Regulations, 2016. The Resolution to liquidate the Corporate Debtor has been passed with 100% CoC vote in its 11th CoC meeting held on 28.09.2020. No Resolution Plan was forthcoming in the CIRP, CoC has rightly passed the resolution to liquidate. It is submitted that the period of 270 days was over and extension was granted by the Adjudicating Authority i.e. 90 days which was also over. It is submitted that the Appellants who were the suspended Directors have not been co-operating with the Resolution Professiona....
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....cating Authority passed an order on 31.07.2020 granting extension of 90 days from 01.07.2020 to 28.09.2020. CIRP period was coming to an end on 28.09.2020 on which date the CoC held its 11th CoC meeting. In the 11th CoC meeting held on 28.09.2020, following resolution was passed in Agenda Item No.5:- "5. TO TAKE DECISION RELATED TO ONGOING CORPORATE INSOLVENCY RESOLUTION PROCESS: The chairman informed that the process of Corporate Insolvency Resolution Process is verge of completion committee has to take decision related to the ongoing corporate insolvency resolution process as no possibility of resolution plan is there. Chairman further added as per section 12 of the code extension of the CIRP can be taken once and that has been given by the Hon'ble tribunal vide order dated 31.07.2020. Discussion held related to the process of liquidation and the appointment of liquidator needs to be finalized. Mr. Himanshu Kumawat (on behalf of Reliance Commercial Finance Limited) having voting share 76.88% proposed the resolution and seconded by Mr. Dhirendra Singh (on behalf of Tata Capital Housing Finance Limited) having 23.12% voting share that company needs to....
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....e committee of creditors [approved by not less than sixty-six per cent. of the voting share] to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1). [Explanation. - For the purpose of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.] (3) Where the resolution plan approved by the Adjudicating Authority 3 [under section 31 or under sub-section (1) of section 54L,] is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii), (iii) of clause (b) sub-section (1). (4) On receipt of an application under sub-section (3), if the Adjudicating Authority determine....
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....g order was passed:- "IA No.325/JPR/2020 This Application has been filed by the RP of M/s. R.S. Motors Private Limited under Section 33(1) of the Code seeking passing of liquidation order. Heard Mr. Varun Mehra, Authorised Representative of the Resolution Professional. The CoC has not considered all the requisites of the Code and regulations in the liquidation process. Hence to enable the RP and COC to take appropriate steps, list the IA No.325/JPR/2020 on 17.12.2020." 15. There were subsequent three orders also passed by the Adjudicating Authority while hearing of IA No.325/2020. In reply, which has been filed by erstwhile Resolution Professional with regard to each direction issued by the Adjudicating Authority relevant steps taken by the Resolution Professional have been stated by Resolution Professional. A perusal of the reply of the Resolution Professional indicate that steps were taken by the Resolution Professional in compliance with the direction passed by the Adjudicating Authority in IA No. 325/2020. 16. The main issue to be considered in this Appeal is as to whether Adjudicating Authority committed error in allowing IA No.325/2020 directing for li....