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Judgment
ORAL ORDER
IA- 28/2024: The prayer made in the captioned application reads thus: -
a)“Allow this instant application and pass necessary order for Liquidation of the corporate debtor under Section 33(2) of the Code considering the resolution passed by the CoC with 100% voting share in favour of liquidation;
b)pass order for appointment of Mr. Atul Jindal, bearing IBBI Reg. No. IBBI/IPA-001/IP-P-02537/2021-2022/13883 as the Liquidator under Section 34(1) of the Code; and
c)Pass such other further order/ orders as may be deemed fit and proper in the facts and circumstances of the instant case.”
Ld. Counsel for the RP could draw our attention to resolution dated 22.05.2024 passed by the CoC with 100% vote share, deciding to liquidate the Corporate Debtor. The relevant excerpt of the resolution reads thus: -
"RESOLVED that pursuant to section 33 (2) and Regulation 40 D of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and other applicable provisions, of the Insolvency and Bankruptcy Code, 2016 and in accordance with rules and regulations made thereunder, the decision to liquidate the corporate debtor - Srivenkateshwar Tradex Private Limited and proceed with the liquidation process, be and hereby is approved.
RESOLVED FURTHER THAT Resolution Professional be and is hereby authorized to file appropriate application incorporating, recorded in view of COC as well as do all such acts, deeds and things as may be required necessary or incidental thereto.
RESOLVED FURTHER THAT the cost incurred by Resolution Professional while filing appropriate application as well as do all such acts, deeds and things as may be required necessary or incidental thereto will form part of CIRP Cost.
RESOLVED FURTHER THAT the recommendations of the members of the Committee of Creditors is hereby accorded for appointment of Mr. Atul Jindal as the liquidator in the matter of Srivenkateshwar Tradex Private Limited pursuant to Section 34 of Insolvency and Bankruptcy Board of India.
RESOLVED FURTHER THAT Resolution Professional be and is hereby authorised to file application for liquidation before National Company Law Tribunal and to initiate/take all actions necessary steps actions in this regard. "
As can be seen from the provisions of Section 33(2) of IBC, 2016, where the CoC decides with vote share of 66% to liquidate the Corporate Debtor, this Tribunal may pass such order as may be passed in terms of Section 33(1) of the Code. The provisions of Section 33(1) and (2) of the IBC, 2016 reads thus: -
“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 liquidation; and
(iii)require such order to be sent to the authority with which the corporate debtor is registered.
(2)Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less than sixty-six per cent. of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).
Explanation. – For the purpose of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.”
In the wake of the aforementioned provisions of the Code and the resolution passed by CoC, the Corporate Debtor is ordered to be liquidated.
Though the application proposed the name of Mr. Atul Jindal i.e. RP qua the CD, to be appointed as the Liquidator, but in the wake of Circular No. Liq-12011/214/2023-IBBI/840 dated 18.07.2023 issued by the IBBI, when the CD goes into liquidation, the IRP/ RP may not be appointed as the Liquidator. The circular dated 18.07.2023 reads thus: -
Thus, the prayer for appointment of Mr. Atul Jindal, RP as Liquidator cannot be granted. Accordingly, from the panel of IBBI, Mr. Rajesh Kumar Parakh [Reg. No: IBBI/IPA-001/IP-P00272/2017-2018/10516; E-mail ID: parakh.rajesh@gmail.com] is appointed as the Liquidator qua the Corporate Debtor to carry out the liquidation process, inter alia, in terms of the following directions: -
The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 (viz. Sections 35, 36, 37, 38, 39 and 41 thereof) and other relevant rules and Regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended up to date enjoined upon him.
The Liquidator shall issue the public announcement that the Corporate Debtor is in liquidation. In relation to officers/ employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge.
The Liquidator shall investigate the financial affairs of the Corporate Debtor particularly, in relation to preferential transactions/ undervalued transactions and such other like transactions including fraudulent preferences and file a suitable application before this Adjudicating Authority.
In terms of section 178 of the Income Tax Act, 1961, the Liquidator shall give necessary intimation to the Income Tax Department. In relation to other fiscal and regulatory authorities which govern the Corporate Debtor, the Liquidator shall also duly intimate about the order of liquidation.
The order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under section 33(5) of the Insolvency and Bankruptcy Code shall commence.
The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company applications during the process of liquidation.
The Liquidator shall submit a Preliminary report to this Tribunal within 75 (seventy-five) days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016. Further such other or further reports as are required to be filed under the relevant Regulations, in addition, shall also be duly filed by him with this Adjudicating Authority.
Copy of this order be sent to the Financial Creditors, Corporate Debtor and the Liquidator for taking necessary steps and for extending the necessary cooperation in relation to the Liquidation process of the Corporate Debtor, viz., company-in-liquidation.
The Registry is directed to communicate this order to the Registrar of Companies, having jurisdiction over the Corporate Debtor and the Insolvency and Bankruptcy Board of India
It goes without saying that fee of the Liquidator would be payable in terms of the provisions of Section 34 (7) of the IBC, 2016 read with Regulation 4 of IBBI (Liquidation Process) Regulation 2016.
The I.A. stands disposed of.