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Judgment
PER: BENCH ORDER
This is an application filed by the Resolution Professional (hereinafter referred to as “RP”) under Section 33(1)(a) read with Section 34(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) praying this Adjudicating Authority to order liquidation of M/s. Bevcon Wayors Private Limited hereinafter referred to as “Corporate Debtor”).
To put precisely, this Tribunal had admitted the Petition filed by M/s Ardee Hi-Tech Private Limited/Operational Creditor on 19.04.2022 and Corporate Insolvency Resolution Process (CIRP) commenced by appointing Ms. Sistla Manjula as Interim Resolution Professional who was later replaced by the Applicant herein as Resolution Professional w.e.f 04.08.2022.
The matter was carried to Hon’ble High Court of Telangana and the CIRP was stayed by the Hon’ble High Court vide order dated 04.08.2022, which was subsequently vacated on 06.09.2022.
In response to the publication of Expression of Interest dated 22.09.2022, the Resolution Professional received interest from three Prospective Resolution Applicants (PRAs) including the Promoter of the Corporate Debtor Mr. Y. Srinivas Reddy Yadiki.
The plan submitted by the Promoter of the Corporate Debtor was deliberated in the 8th CoC on 27.02.2023 and the Promoter was asked to revised his offer. The revised plan submitted by the Promoter was deliberated in the 10th CoC but was rejected with 100% votes on the following grounds:-
The revised resolution plan amount of Rs. 21.46 crores is less than the Liquidation value of Rs.36.65 crores.
The COC did not adhere to the request of the PRA to reduce the requirement of PBG amount.
The source of funds for distribution of the plan amount is Rs. 21,30,52,810/- as per the revised resolution plan.
The COC in its 10th CoC meeting held on 20.04.2023 had unanimously resolved to liquidate the Corporate Debtor with 100% votes and appoint the Applicant herein as Liquidator. Thus submitting, prayed the Adjudicating Authority to order liquidation of the Corporate Debtor.
In terms of section 33 (1) (a) of the Code, which is as below, the liquidation of the corporate debtor can be ordered when the circumstances mentioned in the said section are present.
Section 33 (1)(a): (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.
Hence, this Adjudicating Authority hereby orders liquidation of M/s. Bevcon Wayors Private Limited, the Corporate Debtor herein, which shall be conducted in the manner as laid down in Chapter III of Part II of the Code, 2016;
Shri. M. Venkat Narsinga Rao, Kalvakota Insolvency Professional, having Registration No: IBBI/IPA-001/IP/P-01316/2018-19/12130 is hereby appointed as Liquidator;
He shall issue public announcement stating that the Corporate Debtor is in liquidation in terms of Regulation 12 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016;
The moratorium declared under Section 14 of the Code, shall cease to have effect from the date of the order of liquidation;
Subject to Section 52 of the Code, 2016, no suit or other legal proceedings shall be instituted by/or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
All the powers of the Board of Directors, Key Managerial Personnel and partners of the corporate Debtor shall cease to have effect and shall be vested in the Liquidator.
The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code read with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
Personnel connected with the Corporate Debtor shall extend all assistance and co-operation to the Liquidator as would be required for managing its affairs.
The Liquidator shall be entitled to such fees as may be specified by the Board in terms of Section 34(8) of the Code.
The Applicant is directed to serve the copy of this order to Registrar of Companies, Regional Director, Official Liquidator of Hyderabad, Registered office of the Corporate Debtor and IBBI for information and compliance.