TMI Blog2021 (3) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... on is taken up under Section 33 (2). Appointment of Liquidator and fee to be paid - HELD THAT:- Section 34(1) of the Code provides that where the Adjudicating Authority passes an order for liquidation of the Corporate Debtor under Section 33, the resolution professional appointed for the corporate insolvency resolution process shall, subject to submission of written consent, act as the Liquidator for the purpose of liquidation - The present RP Mr. Satyendra Prasad Khorania is eligible to be appointed as Liquidator. The CoC had also resolved to appoint the RP as Liquidator in the 5th meeting of CoC - Mr. Satyendra Prasad Khorania is appointed as Liquidator. Liquidation Cost (Regulation 39B of CIRP Regulations, 2016) - HELD THAT:- It is noted that the CoC in its 5th meeting has not decided the estimated liquidation cost and discussed that the liquidation cost will be taken on actual basis which will be approved by the Stakeholders committee formed during the liquidation of the Corporate Debtor. The Liquidator is, therefore, directed to take necessary action under Regulation 2A of the IBBI (Liquidation Process) Regulations, 2016 regarding contributions to liquidation costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituted the Committee of Creditors (`CoC'). The 1 st meeting of the CoC was held on 17.10.2019, wherein the CoC unanimously resolved to appoint the IRP i.e., Mr. Satyendra Prasad Khorania as Resolution Professional (`RP') of the Corporate Debtor. Copy of Minutes of the 1 st CoC meeting is enclosed as Annexure-2 of the Application. 4. It is submitted that in compliance with Section 15 of the Code, the RP had initially effected publication of Form G on 01.11.2019 and invited Expression of Interest ( EOI ) for submission of resolution plan for the Corporate Debtor and thereafter, since no resolution plan was received, it again effected publication of Form G on 21.12.2019 for inviting EOI. However, no resolution plan was received till the last date of accepting the EOI. Copy of Form G dated 21.12.2019 is enclosed as Annexure-3 of the Application. 5. It is submitted that in the 4th CoC meeting held on 07.03.2020, the erstwhile director of the Corporate Debtor proposed for a One Time Settlement (`OTS'), amounting to ₹ 7,30,00,000/- wherein ₹ 80,00,000/- would be given upfront to the Financial Creditor, assuring that the OTS proposal would be sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, intimates the adjudicating authority of the decision of the committee of creditor approved by not less than sixty-six percent of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clause (i), (ii) and (iii) of clause (b) of Sub-Section (1) 8. The Hon'ble National Company Law Appellate Tribunal (`NCLAT'), in Praveen Kumar Nanda Kumar Vs. VSL Securities Pvt. Ltd. in CA No. 1/2020 in CA No. 308/2000, dated 09.06.2020, observed as under: - Likewise, the decision of the COC recommending liquidation of the corporate debtor after proper evaluation of the assets and liabilities of corporate debtor with no Resolution Plan forthcoming would be a business decision falling within the domain of commercial wisdom of the COC which is not amenable to judicial review. However, it is to be seen whether the relevant application is filed within stipulated time lines and as per applicable procedure. 9. Prescribed period for filing application - In the present case, the application under Section 7 of the Code was admitted on 20.09.2019 and the present application was filed by the RP on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process. 12. As per Notification No. IBBI/2020-21/GN/REG059 dated 20.04.2020, the period of Lockdown is excluded for the purpose of calculating the timelines in CIR Process. Hence, after considering exclusion of lockdown period till 31.05.2020, the present application is filed within the prescribed period. In view thereof the Application under consideration is taken up under Section 33 (2). 13. Appointment of Liquidator and fee to be paid - Section 34(1) of the Code provides that where the Adjudicating Authority passes an order for liquidation of the Corporate Debtor under Section 33, the resolution professional appointed for the corporate insolvency resolution process shall, subject to submission of written consent, act as the Liquidator for the purpose of liquidation. The relevant provisions of Section 34(1) of the Code are as follows: - (1) Where the Adjudicating Authority passes an order for liquidation of the corporate debtor under Section 33, the resolution professional appointed for the corporate insolvency resolution process under C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CoC unanimously resolved that the fee of the Liquidator shall, for- a. the period, if any, used for compromise or arrangement under Section 230 of the Companies Act, 2013; and b. the period, if any, used for sale under clauses (e) and (f) of Regulation 32 of IBBI (Liquidation Process) Regulations, 2016; be same as the fee of RP and for the period thereafter, as per Regulation 4(2)(b) of IBBI (Liquidation Process) Regulations, 2016. Further, the CoC also resolved while deciding upon the matter of the fee of the Liquidator that if the security interest is not relinquished by the secured financial creditor and it chooses to exercise its right under Section 52(1)(b) of the Code, then the remuneration of the Liquidator would be fixed to be ₹ 50,000 per month until winding up of the Corporate Debtor. 19. In view of the satisfaction of the conditions provided under Section 33(2) of the Code, the Corporate Debtor, Atlas Alloy (India) Pvt. Ltd. is directed to be liquidated in the manner as laid down in Chapter III of the Code. The contextual directions inter-alia include: - (i) As per Section 33(5) of the Code and subject to Section 52 of the Code, no suit or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PR/2019 Under Section 19 (2) of Code To direct the Suspended Directors of the Corporate Debtor and Statutory Auditor of the Corporate Debtor to provide all the documents and records and also to cooperate with the RP. Since the above stated pending IA No. 424/JPR/2019 has bearing on the issues in liquidation proceedings, it is directed to be listed along with the CP No. 205/7/JPR/2019 when the matter is next placed before this Adjudicating Authority. If so advised, the Liquidator may move appropriate applications for prosecution of the said application by a suitable person / entity instead of the RP and the Liquidator is not precluded from carrying on the said proceedings. 21. It is seen that IA No. 93/JPR/2020 was filed by the erstwhile director of the Corporate Debtor under Section 60(5) of the Code stating that the erstwhile director has challenged the CIRP order dated 20.09.2019 before the Hon'ble NCLAT on the ground that he was not served any notice or information about initiation of CIRP of the Corporate Debtor. The erstwhile director had prayed to direct the RP to withhold the operation and proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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