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2021 (11) TMI 904 - Tri - Insolvency and BankruptcyDissolution of Corporate Debtor - Regulation 22(2) of IBBI (Insolvency Resolution Process of Corporate Persons) Regulations 2016 - HELD THAT:- This Bench is of the view that the prayer made by the IRP for dissolution of the Corporate Debtor cannot be accepted since the Liquidation is a pre-requisite to the Dissolution and in the present case, no order of Liquidation has been passed due to absence of any such proposal and non-functioning of the CoC. Even if the ETO Bahadurgarh has withdrawn its claim, the CoC could have functioned with the Sole Member/Operational Creditor, at whose instance the CIRP was initiated. However, in the present case we notice that even the Sole Member/Operational Creditor of the CoC has been shirking from the responsibility and not pursuing the CIR Process of the Corporate Debtor - As per the Code, if any person [as defined under Section 3(23) of IBC] initiates the Insolvency Resolution Process fraudulently or with malicious intent for any purpose other than for the resolution of the insolvency, or liquidation, such an act is punishable under Section 65(1) of IBC 2016. Hence, before taking any action under Section 65(1) IBC 2016, we think it proper to issue a show cause notice, under Rule 59 of the National Company Law Tribunal Rules 2016, on the Operational Creditor M/s. Om Logistics Ltd. through its Directors as to why the penalty as stipulated under Section 65(1) of IBC, 2016 shall not be imposed on it. Ld. Registrar NCLT is directed to issue the show cause notice under Section 65(1) of IBC 2016 read with Rule 59 of the National Company Law Tribunal Rules, 2016 on M/s. Om Logistics Ltd. through its Directors giving them fifteen days' time to explain and submit in writing as to why the penalty as stipulated under Section 65(1) of IBC, 2016 shall not be imposed on them. When the Applicant is unable to carry forward the CIR process for want of cooperation/participation from the sole member of CoC, it is deemed appropriate to terminate the CIR process of the Corporate Debtor - by exercising the jurisdiction under Section 60(5) of IBC 2016 along with inherent power under Rule 11 of the NCLT Rules, 2016, the CIR process of the Corporate Debtor is terminated with immediate effect and release the Corporate Debtor from the rigors of the CIRP and moratorium. Application allowed.
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