2018 (9) TMI 1882 - Tri - Insolvency and Bankruptcy

Liquidation of assets of Corporate Debtor - CIRP under process - expiry of period of 180 days - Section 33(2) of the I B Code 2016 - HELD THAT - It is stated by the Resolution Professional that despite consistent efforts being taken by him no Resolution Plan was forthcoming in respect of the Corporate Debtor and the period of CIRP expired on 08.08.2018 therefore the Resolution Professional informed the CoCs that there are two agendas for voting; one for extension of time for 90 days or liquidation. The resolution is put to the vote and ARCIL having 70.11 per cent vote share have voted against the extension of time and voted in favour of liquidation of the Corporate Debtor. The L T Finance having 29.89 per cent vote have voted in favour of extension of time and voted against liquidation of Corporate Debtor. Hence resolution for liquidation of Corporate Debtor is approved by 70.11 per cent vote. This Authority orders for liquidation of the Corporate Debtor viz. M/s. Meka Dredging Company Private Limited which shall be conducted in the manner as laid down in Chapter III of Part II of the I B Code 2016 - This Authority appoints the Resolution Professional viz. Mr. Dhiren Shantilal Shah Company Liquidator who shall issue a public announcement stating therein that the Corporate Debtor is in liquidation - moratorium declared.

Summary

Issues:
1. Application for liquidation of assets of a Corporate Debtor under the Insolvency and Bankruptcy Code, 2016.
2. Approval of liquidation by the Committee of Creditors (CoCs) and subsequent legal proceedings.
3. Appointment of Resolution Professional as Company Liquidator for the liquidation process.
4. Ceasing of moratorium and transfer of powers to the Company Liquidator.
5. Compliance and cooperation required from personnel of the Corporate Debtor during the liquidation process.
6. Determination and payment of fees to the Company Liquidator for conducting the liquidation proceedings.

Analysis:
1. The judgment involves an application for the liquidation of the assets of a Corporate Debtor, M/s. Meka Dredging Company Private Limited, filed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional sought liquidation as the Corporate Insolvency Resolution Process (CIRP) had expired, and no Resolution Plan was forthcoming. The Committee of Creditors (CoCs) approved the liquidation in a meeting, leading to the filing of a Miscellaneous Application for liquidation.

2. The CoCs unanimously resolved to appoint the Resolution Professional as the Interim Resolution Professional (IRP) during the CIRP. Despite efforts to invite Resolution Plans, none were received, resulting in the decision to liquidate the Corporate Debtor. The resolution for liquidation was approved by 70.11% of the vote share, leading to the formal approval of liquidation in the 9th Meeting of the CoCs.

3. The Tribunal, in exercising its powers under Section 33 of the I&B Code, 2016, ordered the liquidation of the Corporate Debtor, appointing the Resolution Professional as the Company Liquidator. The Liquidator was tasked with issuing a public announcement, ceasing the moratorium, and taking over the powers of the Board of Directors and other relevant personnel as per the Code and regulations.

4. The judgment emphasized the cessation of the moratorium, transfer of powers to the Company Liquidator, and the need for compliance and cooperation from the Corporate Debtor's personnel during the liquidation process. Legal proceedings could only be initiated by the Liquidator with prior approval, and certain transactions were exempt from the restrictions as notified by the Central Government.

5. The Company Liquidator was entitled to charge fees for conducting the liquidation proceedings, to be paid from the proceeds of the liquidation estate. The judgment outlined the process for fee determination and payment, emphasizing compliance with regulatory requirements and the involvement of relevant authorities for information and compliance purposes.