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Judgment
ORDER
Per Balraj Joshi, Member (Technical)
This Court convened through hybrid mode.
I.A.(I.B.C) No. 895/KB/2023 is an application filed under Section 33 (1) (a) of the Insolvency Bankruptcy Code, 2016 (in short “IBC”) by the Resolution Professional (“RP”) of Bard Roy Infotech Private Limited, the Corporate Debtor, praying for liquidation of the Corporate Debtor. This application is supported by an affidavit1 duly affirmed by Mr. Kamal Nayan Jain, the RP.
The Adjudicating Authority, on a petition filed u/s 10 of the Insolvency and Bankruptcy Code, 2016 read with rule 7 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016 by Bard Roy Infoetch Private Limited, the Corporate Applicant, vide order dated 02.11.2022 in C.P.(I.B.) No. 201/KB/2022, had ordered initiation of CIRP against the Corporate Applicant. Mr. Kamal Nayan Jain was appointed as the Interim Resolution Professional (“IRP”).
It is stated in the application in terms of regulation 6(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, (“CIRP Regulations”) Public Announcements in Form A was published on 05.11.2022 inviting claims from the creditors in two newspapers, viz., “Business Standard” (English) and “Ekdin” (Bengali) mentioning the last date of submission of claims as 16.11.2022. Committee of Creditors (“CoC”) was duly formed on 25.11.2022. At first CoC meeting held on 01.12.2022, the IRP was appointed as Resolution Professional (“RP”).
It is also stated in the application that the IRP/RP has altogether held six CoC meetings on 01.12.2022, 30.12.2022 24.03.2023, 05.04.2023, 24.04.2023 and 28.04.2023 respectively and also submitted two Progress Reports on 12.12.2022 and 12.04.2023 respectively.
It is stated in the application that in terms of regulations 36A(1) of the CIRP Regulations, Expression of Interest (“EoI”) was published in Form G on 31.12.2022 in leading newspapers namely “Business Standard” (Kolkata) English Edition, “Ekdin” (Bengali). The last date for the submission of EoI expired on 15.01.2023 and in response RP has received EoIs from three prospective bidders. However, the CoC did not find it feasible for the prospective bidders to submit their resolution plan and wanted the Corporate Debtor to go into liquidation directly, as because if the CIRP process continued it would have increased the CIRP cost without any fruitful outcome which would ultimately create a burden on the stakeholders.
It is stated in the application that in the 5th CoC meeting it was decided by the CoC, since no EoI was found feasible within the maximum permissible CIRP period, there is no other option but to liquidate the company under Section 33(1) (a) of the IBC, 2016. However, the CoC has further decided to sell the ompany as per regulations 32E and 32F of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
It is also stated in the application that the following resolutions were taken and recorded in the 5th CoC meeting2 held on 24.04.2023 which are as follows:
Item No 4, Resolution No. 1;
"RESOLVED THAT, since the COC were of the opinion that even after the receipt of 3 EOI from the Prospective Resolution Applicant, the possibility of resolution is negligible and the CIRP period is expiring on 01.05.2023 and the delay in completion of CIRP will only cause to increase CIRP cost, there is no other option left but to liquidate the CD and requisite application to be filed with Hon'ble NCLT in terms of the provisions of the section 33 of the IBC, 2016."
"The COC have approved the resolution by 86.43% of votes in favor the agenda.
Item No 5; Resolution No. 2;
"RESOLVED THAT, the expenses incurred from fourth COC meeting till the date of this meeting placed before the COC is hereby approved by the COC member."
"The COC have approved the resolution by 86.43% of votes in favor the agenda."
Item No 6: Resolution No. 3;
"RESOLVED THAT, the COC recommends the Corporate Debtor to be sold as a going concern at least within a period of 90 days as per Regulation 32 (e) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 or as a sale of the business of the corporate debtor as a going concern for atleast within a period of 90 days as per Regulation 32(f) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, during the liquidation period."
"The COC have approved the resolution by 86.43% of votes in favor the agenda."
Item No 7: Resolution No. 4;
"RESOLVED THAT, the Committee hereby recommends and approves the appointment of Mr. Kamal Nayan Jain (Registration No. IBBI/IPA-001/IP-PO0029/2016-17/10065) as the Liquidator of the CD if the COC members has decided the company to be referred into Liquidation under section 33 of the code."
"The COC have approved the resolution by 86.43% of votes in favor the agenda."
Item No 8: Resolution No. 5;
"RESOLVED THAT, remuneration of the liquidator to be same as the existing RP's fees which is minimum of Rs. 1 lac per month (plus applicable taxes), from the date of the NCLT Order for liquidation till the period of three months."
"RESOLVED FURTHER THAT, liquidator fees for further period of time of liquidation after three months from the date of order of liquidation shall be decided during upcoming COC meeting to be held shortly" "The COC have approved the resolution by 86.43% of votes in favor the agenda.”
Item No 9: Resolution No. 6;
"RESOLVED THAT, liquidation cost as would accrues from time to time, and at actuals shall be borne by the stakeholders proportionately as per the voting percentage."
"The COC have approved the resolution by 86.43% of votes in favor the agenda."
Item No 10: Resolution No. 7;
"RESOLVED THAT, the COC recommends to explore compromise or arrangement as referred to under sub-regulation (1) of regulation 2B of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016 and the Resolution Professional shall submit the COC recommendation to the Adjudicating Authority while filing application under Section 33."
"FURTHER RESOLVED THAT, where a recommendation has been made under sub-regulation (1), the resolution professional and the committee shall keep exploring the possibility of compromise or arrangement during the period the application to liquidate the corporate debtor is pending before the Adjudicating Authority."
"The COC have approved the resolution by 86.43% of votes in favor the agenda."
The applicant has submitted his consent3 under the provisions of Section 34(1) of the Insolvency and Bankruptcy Code, 2016 to act as the liquidator of the Corporate Debtor.
Section 33(1)(a) of the Code mandates that the Adjudicating Authority shall passan order of liquidation where no resolution plan is received before the expiry of the CIRP. Sub-section (2) thereof requires the Adjudicating Authority topasstheliquidation order where the Resolution Professional intimates to the AdjudicatingAuthority the decision of the Committee of Creditors approved by not less than66% of the voting share to liquidate the Corporate Debtor.
A conjoint reading of these two provisions leaves this Adjudicating Authority with no other option but to order liquidation of the Corporate Debtor.
This Bench, therefore, hereby orders as follows: -
a. IA(IBC)/895(KB)2023 filed by Mr. Kamal Nayan Jain, RP of Bard Roy Infotech Private Limited, the Corporate Debtor, is allowed. Consequently, the Corporate Debtor is ordered to be liquidatedinterms of section 33(2) of the Code read with sub-section (1) thereof;
b. Though the RP has given his consent to act as the Liquidator of the Corporate Debtor but in view of direction of the IBBI Circular dated 18/07/2023 vide no. Liq-12011/214/2023-IBBI/840 for appointment of Liquidator other than IRP/RP under section 34(4)(b) of the Code we are appointing Mr. Chhedi Rajbhar, (Reg No. IBBI/IPA-001/IP-P00129/2017-2018/10271) having e-mail id crajbharco.ca@gmail.com, mobile no. 9831182472 as Liquidator as provided under section 34(1) of the Code, subject, however, to his possessing a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which he is a professional member, in terms of regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2019. The Liquidator is directed to submit his consent to act as Liquidator within 10 days of receipt of this order. The erstwhile RP shall handover all papers and documents in his possession concerning the Corporate Debtor to the Liquidator appointed in this matter within 10 days.
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, 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 himin 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 orother 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.
In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, within whose jurisdiction the Corporate Debtor is registered. Additionally, the Registry shall also forward a copy of this Order to the Registrar of Companies, West Bengal.
The application bearing I.A.(I.B.C) No. 895/KB/2023 shall stand disposed of in accordance with the above directions.
CP(IB)/201(KB)2022 is to come up for filing of Periodical Progress Report on 10.10.2023.
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.