TMI Blog2023 (9) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor was taken with 100% vote share - It is noted that timeline for CIRP even after extension of 90 days was coming to an end on 28.09.2020 - When CIRP period was coming to an end on 28.09.2020, CoC, there being no Resolution Plan in the CIRP, had rightly passed a resolution to liquidate the Corporate Debtor with 100% vote share. The submission of the Appellant that Resolution Professional did not complete the various process including obtaining the Audit Report cannot be accepted. The period of CIRP having coming to an end, CoC has no option but to take a decision of the liquidation of the Corporate Debtor. In the facts of the present case, there are no error in the decision of the Adjudicating Authority allowing the liquidation application - appeal dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellants : Mr. Puneet Jain, Mr. Himanshu Satija, Mr. Harsh Saxena, Mr. Umang Mehta, Advocates For the Respondents : Mr. Nikhil Yadav, Advocate for R-1. Mr. Varun Mehra, PCS for R-2. JUDGMENT Ashok Bhushan , J. 1. This Appeal by two Suspended Director of the Corporate Debtor have been filed chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that the CoC and the Resolution Professional have not considered all the requisites of the Code. The application was adjourned to 17.12.2020 to enable the CoC and the Resolution Professional to take appropriate steps. The Adjudicating Authority while considering the liquidation application IA No. 325/2020 issued directions dated 18.11.2021, 17.12.2021 and 07.03.2022. IA No. 325/2020 was heard and allowed by order dated 31.08.2022, aggrieved by which order, this Appeal has been filed. 3. We have heard Shri Puneet Jain, Learned Counsel for the Appellant, Learned Counsel appearing for the Liquidator and Learned Counsel appearing for the erstwhile Resolution Professional. 4. Learned Counsel for the Appellant challenging the order of the Adjudicating Authority submits that the Resolution Professional has neither completed the audit of the Corporate Debtor nor have prepared the Information Memorandum including all assets of the Corporate Debtor. Assets of the Corporate Debtor have been siphoned by other Directors against whom the Appellant have already filed First Information Report. It is submitted that without completing necessary process, the CoC could not have passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that cause shown in the Application in paragraph 6 is sufficient to condone the delay. Delay of 15 days is hereby condoned. Comp. App. (AT) (Ins.) No. 1288 of 2022 2. Learned Counsel for the Appellant submits that the Resolution Professional did not comply with the direction issued by the Adjudicating Authority on the application for liquidation earlier passed on 26.11.2020, 18.11.2021, 17.12.2021 and 05.03.2022. It is submitted that without compliance of those orders, order of liquidation has been passed. 3. Learned Counsel appearing for the Respondent No.4 submits that all process was expedited and there is no error in the liquidation order passed by the Adjudicating Authority. 4. Considering the above submissions, we issue limited notice only to Respondent Nos. 1 and 2 to submit a Reply with regard to steps taken in pursuance of the orders of the Adjudicating Authority, as noted above. Requisites along with process fees be filed by the Appellant within three days. Let Reply be filed within two weeks. 5. Learned Counsel for the Appellant seeks liberty to remove the defects. He may do so within a week. 6. List the Appeal on 25. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Professional to file an Application. The Resolution of the CoC noted that in ongoing CIRP no possibility of Resolution Plan is there. It was further noted that the extension of the CIRP has already been taken by order dated 31.07.2020. Noticing the above circumstances, the resolution was passed to liquidate the Corporate Debtor. 11. Section 33 of the IBC deals with initiation of liquidation . Section 33 provides as follows:- 33. Initiation of liquidation. - (1) Where the Adjudicating Authority, - (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or (b) rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein, it shall (i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter; (ii) issue a public announcement stating that the corporate debtor is in liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator. 12. The present is a case where before expiry of CIRP period or the maximum period permitted for completion of the CIRP, no Resolution Plan was received. The CoC has passed a resolution to liquidate the Corporate Debtor by vote share of 100%. The statutory scheme indicates that in the eventualities mentioned in Section 33(1) (2) initiation of liquidation proceedings can be made by the Adjudicating Authority. In the present case, extension granted by the Adjudicating Authority of 90 days by order dated 31.07.2020 was also coming to an end on 28.09.2020 on which date CoC in 11th meeting decided to liquidate the Corporate Debtor. 13. Now coming to the submission of the Counsel for the Appellant that in the resolution process, necessary process was not completed. It has been in the Appeal itself stated that on 31.08.2020, Forensic Auditor has submitted its report and on the basis of Forensic Audit Report, IA No. No.291/2020 was filed under Sections 45, 49 and 66 of the IBC by the Resolution Professional in which application notices we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIRP has expired, order of liquidation has to be upheld. This Tribunal in the said case laid down following: After hearing learned counsel for the Appellant and Shri Haribabu Thota, Resolution Professional in person (Respondent No. 3) and Shri K. Dushyantha Kumar, Liquidator in person (Respondent No. 4), we find that the Corporate Insolvency Resolution Process initiated at the instance of the Financial Creditor M/s VSL Securities Pvt. Ltd. , in terms of order of admission dated 31st July, 2019 passed by the Adjudicating Authority in CP No. 172 of 2019, culminated in passing of the impugned order dated 8th January, 2020, in terms whereof the Corporate Debtor has been sent into liquidation. It further appears that no Resolution Plan was forthcoming within the prescribed timelines as the liquidation cost was not ascertainable and available liquid assets were only of the value of Rs.29,60,000/- whereas total claims received against the Corporate Debtor were for Rs.2,35,72,27,259/-. The Committee of Creditors finding no other option available recommended initiation of liquidation proceedings by a majority of 70.97%. It is by now settled that, the commercial wisdom of the Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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