Arvind Industrials vs Shree Gajapati Paints Private Limited

Per: Harish Chander Suri, Member(Technical)

This Court convenedvia video conference today.

This is an application filed by the Resolution Professional (RP), seeking liquidation of the Corporate Debtor, namely, Shree Gajapati Paints Private Limited, (CIN:U39912WB2013PTC198133), on the ground that no Resolution Plan was received.

This Adjudicating Authorityvide its order dated 25.10.2019, on a Petition filed by Arvind Industrials, Operational Creditor, under section 9 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’), read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudication Authority) Rules, 2016, directed initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appointed the Applicant herein, as the Interim Resolution Professional.

The CIRP of the Corporate Debtor, Shree Gajapati Paints Private Limited, was initiated, as above, on 25^th October, 2019 and completed on 26^th January, 2021, after considering the exclusion of lockdown period of 190 days from 25^th March, 2020 to 30^th September, 2020 and one time extension of 90 days period with effect from 29^th October, 2020, as per Order of this Adjudicating Authority dated 20^th November, 2020.

The Committee of Creditors, in its first meeting held on 28^th November, 2019, had appointed Mr. Rasik Singhania, IRP, the Applicant, as the Resolution Professional (RP).

In terms of section 15 of the Code, on 26.1.2020, the RP had published Form-G thrice in the newspapers with regard to Expression of Interest, firstly on 8^th January, 2020, secondly on 6^th February, 2020 and lastly on 9^th November, 2020. In spite of the said publication, no Resolution Plan has been received by the Resolution Professional.

In view of the aforesaid facts, the Resolution Professional called the 8^th meeting of the Committee of Creditors on 6^th January, 2021, wherein the Committee of Creditors, pursuant to Section 33(2) of the Insolvency & Bankruptcy Code, 2016, had passed the resolution for initiation of liquidation against the Corporate Debtor through voting and requested the Resolution Professional to intimate the Adjudicating Authority of the decisions of the Committee of Creditors to liquidate the Corporate Debtor. The copies of the minutes of the 8^th CoC is annexed with the Application and marked as Annexure-D.

In the said 8^th meeting of the Committee of Creditors, although the resolution for initiation of Liquidation against the Corporate Debtor, was taken, fees of the Liquidator as per Regulation 4(2) of Liquidation Regulations and Estimated Liquidation cost, as per Regulation 39B, has also been approved with 100% voting share. The decision to sell the Corporate Debtor, as a going concern, has not been passed and the members of the Committee of Creditors abstained from voting as they would decide on the same at a later stage.

In the present case, the RP wanted to continue as the liquidator. A copy of the consent letter of the Resolution Professional, Mr. Rasik Singhania, to act as the Liquidator, is also annexed with the Application and marked as Annexure – E.

Considering the decision of the Committee of Creditors under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, the Resolution Professional has submitted this Application and prayed for allowing the same and to pass Order of Liquidation, pursuant to Section 33(1) of the Insolvency & Bankruptcy Code, 2016, condoning the delay in filing this Application due to health issues faced by the Resolution Professional.

We have heard the Ld. Counsel appearing for the Applicant, as well as the Ld. Resolution Professional, appeared in person.

Section 33(2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor, where the Resolution Professional, at any time during the CIRP but before confirmation of the Resolution Plan, intimates the Adjudicating authority of the decision of the CoC, approved by not less than sixty-six percent of the voting share, to liquidate the Corporate Debtor. In the present case, the CoC has resolved by 100% voting share to liquidate the Corporate Debtor.

This Bench, therefore, hereby orders as follows: -

a. The Application, IA169(KB)/2021, filed by Mr. Rasik Singhania, Resolution Professional of Shree Gajapati Paints Private Limited, the Corporate Debtor, is allowed and the Corporate Debtor is ordered to be liquidated in terms of Section 33(2) of the Code read with sub-section (1) thereof.

b. Invoking the powers conferred by Section 34(4)(c) of the Code, this Adjudicating Authority hereby appoints Mr. Rasik Singhania, Resolution Professional, having registration No., IBBI/IPA-001/IP-P00390/2017-18/10708, e-mail Id : [email protected], Mobile No. 9433146020, 9332689898, as the Liquidator of the Corporate Debtor.

c. The Liquidator shall initiate liquidation process, as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

d. Public Notice shall be issued in the same newspapers in which advertisements were issued earlier, i.e., in ‘Business Standard’ and ‘Financial Express’ (English) and ‘Ekdin’ and ‘Aajkaal’ (Bengali) of Kolkata edition of the said newspapers stating that the Corporate Debtor is in liquidation.

e. All the powers of the Board of Directors, and of key managerial persons, shall cease to exist in accordance with Section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator.

f. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator, as required by him in managing the liquidation process of the Corporate Debtor.

g. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor, save and except, the liberty to the liquidator to institute suit or other legal proceeding on behalf of the Corporate Debtor, with prior approval of this Adjudicating Authority, as provided in Section 33(5) of the Code, read with its proviso.

h. In accordance with Section 33(7) of the Code, this liquidation order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except to the extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator.

The Application bearing IA169(KB)/2021 in CP(IB)/314(KB)/2019, shall stand disposed of, in accordance with the above directions.

The Company Petition, CP(IB)/314(KB)/2019, to come up for filing of periodical report on 20-5-2021.

The Registry is directed to send e-mail copies of the Order forthwith to all the parties and their Ld. Counsel, for information and for taking necessary steps.

Certified Copy of this Order may be issued, if applied for, upon compliance of all requisite formalities.