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TMI Blog2023 (4) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted Committee of Creditors (COC) as per the Regulations 13(2)(d) and 17(1) of the CIRP Regulations and the IRP filed a report before the NCLT, Hyderabad. The IRP was confirmed and appointed as Resolution Professional in the first CoC meeting held on 10th October, 2019. The Registered Valuers, appointed by the RP, submitted their valuation report with regard to the fair market value and liquidation value of the CD. The liquidation value was arrived at Rs. 113.72 crores. iii) The applicant issued invitation for expression of interest (EoI) and the last date for receipt of expression of interest was 30/11/2019. Th first extension of Invitation for EoI was issued on 06/12/2019 fixing the last date as 26/12/2019 and the last date for submission of resolution plan was 30/01/2020. On the approval of CoC, the applicant further issued 2nd extension of invitation for expression of interest on 09/01/2020 and the last date for submission of resolution plan was on 04/03/2020. Resolution applicant has shown interest in submitting a resolution plan. iv) In the 5th CoC meeting held on 15/02/2020, the CoC decided to amend the bid valuation matrix to identify the best resolution plan and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso highlighted, that in the event the CD goes for liquidation, it may derail the OTS process and the incoming external investor, namely, "Cantor Fitzgerlad" with whom an "ESCROW" arrangements were already finalized by SBI. SBI, during 18th CoC meeting, unanimously informed the applicant RA that the OTS proposal is under active consideration and directed the RP to seek extension of 60 days of the CIRP period by filing an application before the NCLT, Hyderabad. The NCLT, Hyderabad disposed of the application as not maintainable on the ground that no resolution plans were pending before RP and CoC and since the OTS proposal is a matter between the CD and SBI. viii) Considering that the CIRP period has already expired on 13th January, 2021 and that there are no resolution plans for consideration of the CoC, the present application is filed seeking for liquidation of CD. 3. No counter was filed, but, both the learned counsel extended their arguments and filed written submissions. i) The counsel appearing for the suspended director of the CD did not extend any argument, with regard to the necessity for ordering liquidation against CD, but he put-forth some technical objections. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(3) of IBC, contemplates that suspended Board of Directors are one of the participants in the CoC meeting, the RP issued CoC meetings notice to the suspended board of directors. v) The respondent's counsel relied on the judgment of the Apex Court in case of Vijay Kumar Jain Vs Standard Bank. 4. The ld. Counsel appearing for RP submits that SBI had already sent a letter dated 11th February, 2022 to Corporate Guarantor informing that even after providing sufficient time for arranging the funds, the CG has failed to arrange the funds towards the compromise proposal and hence, SBI has cancelled the compromise proposal and a letter was served to the suspended director. He contends that in view of the settled law that once the time limit as per section 12 of the Code expires, corporate insolvency and resolution process cannot continue beyond 330 days. As a corollary, initiation of liquidation process is mandatory. He submits that the SBI, in its meeting of the Wilful Defaulter Identification Committee - II held on 19th March, 2021 has resolved and concluded that the CD Mr. Arun Agarwal, Mrs. Neha Agarwal (suspended directors), Suryajyoti Infotech Ltd and Pangea Fabrics Pvt. Ltd. (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of CIRP of 330 days has expired and as no resolution plan was available for consideration before the CoC. In such circumstances, the NCLT, Hyderabad Bench ordered for liquidation by invoking powers u/s 33 of the Insolvency & Bankruptcy Code, 2016. (IBC) 10. The objections raised by the respondent's counsel with regard to the dismissal of the application on the ground that it has become infructuous is hyper technical. The object of the Code is certainly not to frustrate the proceedings by adopting hyper technical approach. The fact remains that there is no resolution plan pending before the CoC and in the 18th CoC meeting, the RP explained to the CoC that in the event, the NCLT, Hyderabad does not accede to the request of granting further extension of 60 days, the liquidation process u/s 33(1) of Code shall commence in line with the order dated 31/12/2020. The ld. Counsel for the petitioner relies on this part of the Minutes of the 18th CoC meeting to contend that resolution of the CoC has to be deemed as being made, since CoC also noted the explanation given by the RP with regard to the liquidation. However, the Hyderabad Bench of NCLT, in the similar circumstances, has ordered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. Counsel for the petitioner, when, under section 33(1)(a), the Adjudicating Authority has power to order for liquidation when no resolution plan is submitted to it, it implies that the Adjudicating Authority has to only see whether any resolution plan has come up before it for approval prior to the order for liquidation under section 33(1)(a). As no resolution plan is received by the Adjudicating Authority, the questions whether CoC has resolved for liquidation or whether there is no coordination between RP and CoC, are immaterial for the Adjudicating Authority to order for liquidation u/s 33(1)(a). 15. In view of the above, we do not find any reason to reject the request made by the RP to order for liquidation of the Corporate Debtor. 16. As regards the contention that this application becomes infructuous, we are unable to accept the contention of the Respondent's counsel, it being, hyper technical. This application for some or the other reason has been kept pending and has now come up before us for adjudication by considering only the circumstances, which are relevant for granting the prayer in the application. Dismissing this application and driving the RP again befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Managerial Personnel and the Partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested in the Company Liquidator Viz., Mr. Kondapalli Venkata Srinivas. In addition to this, the Company Liquidator shall exercise the powers and duties as enumerated in sections 35 to 50, 52 to 54 of the I&B Code, 2016, r/w Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. (viii) The personnel of the Corporate Debtor shall extend all assistance and cooperation to the Company Liquidator as may be required by him in managing the affair of the Corporate Debtor. (ix) The Liquidator shall keep in view the provisions of Regulation 32A of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and shall endeavour to first sell the Corporate Debtor or its business as going concern. However, if he is unable to sell the Corporate Debtor or its business within 90 days from liquidation commencement date, Liquidator shall proceed to sell the assets of the Corporate Debtor under clauses (a) to (d) of Regulation 32 of Insolvency and Bankruptcy Board of India (liquidation process) Regulations, 2016. (x) The C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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