2019 (10) TMI 1347 - Tri - Insolvency and Bankruptcy

Liquidation Order - section 33(1) of the Insolvency and Bankruptcy Code 2016 - HELD THAT - In the 9th CoC meeting RP apprised the CoC about the revised public announcement made on 25.04.2019 for inviting EoI and the last date for submission was fixed on 06.05.2019. Since no resolution plan was received CoC directed the RP to call next meeting of CoC to discuss liquidation - Accordingly in the absence of any EoI CoC passed a resolution in its 10th CoC meeting to liquidate the Corporate Debtor Company and further resolved the appointment of RP as liquidator. It is found that CoC voted in favour of liquidation by 100% voting - it is the commercial wisdom of the CoC as such we do not found any reason to interfere with the decision of the CoC. Accordingly the application so filed by the RP is allowed and the RP may continue as liquidator. However the liquidator is expected to dispose off the Corporate Debtor Company as a going concern. Application disposed off.

Summary

Issues: Application for liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016.

The judgment pertains to an application filed by the Resolution Professional (RP) seeking an order of liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016 (IB Code). The case involves the admission of a petition under section 9 of the IB Code, the appointment of an Interim Resolution Professional (IRP), the constitution of the Committee of Creditors (CoC), and the subsequent replacement of the IRP with the RP. The CoC proposed a Forensic Audit due to losses and inventory reduction, leading to the discontinuation of certain services. Claims from various creditors were reviewed, and the RP invited quotations from Forensic Auditors. The CoC meetings discussed the eligibility criteria for resolution plans, absenteeism of suspended board members, and the decision to liquidate the Corporate Debtor Company. The CoC voted unanimously in favor of liquidation, and the RP was appointed as the liquidator. The judgment emphasized the commercial wisdom of the CoC and directed the liquidator to dispose of the company as a going concern. The order also outlined the process for disposal of assets in case the sale as a going concern fails within a specified period, along with directives for public announcements and communication with the Registrar of Companies.

This detailed analysis covers the procedural aspects, decision-making process, CoC discussions, liquidation order, commercial wisdom consideration, and directives for the liquidator as outlined in the judgment delivered by the National Company Law Tribunal, Ahmedabad Bench.