Deep Star Alloys And Steels Private Limited vs Navmi Steel Traders Private Limited

Learned Counsel, Raina Birla a/w Henna Jain appeared for the Applicant/RP.

This Application has been filed by the RP under Section 60(5) of IB Code, 2016 r/w Rule 11 of NCLT, 2016 seeking extension in the CIRP for a period of 90 days from 10.12.2024 to 10.03.2025.

While considering the application for extension of 90 days in IA 4760/2024, this bench noted the submission of Counsel for the Applicant therein that “the Resolution Plan has been received from the Prospective Resolution Applicant, however, the same could not be put for voting on account of indecisiveness of one of the Members of the Committee of Creditors, who holds 60% of vote shares. Applicant is quite hopeful that if the extension is given, the Income Tax Department would be in a position to make up their mind”. After taking it into consideration this bench vide order dated 21.10.2024, as a last resort, allowed the IA 4760/2024 thereby extending the period of Corporate Insolvency Resolution Process of the Corporate Debtor by 90 days so as to end on 09.12.2024. Vide said order, this bench had also directed Members of Committee of Creditors to either vote on the Resolution Plan or to pass Resolution for the Liquidation of the Corporate Debtor, within 15 days from the date of communication of this Order. Resolution Professional is directed to call for a meeting and put a copy of this Order before the Members of the Committee of Creditors.

The present Application seeks further extension of 90 days from 10.12.2024. On perusal of minutes of the CoC meeting held on 26.11.2024 it is noticed that the Income Tax Department, the CoC member having major share had sought further time to vote on the Resolution Plan stating that the same has been placed before the Principal Commissioner of Income Tax for further instruction and approve the Resolution seeking further extension of 90 days. In the present case CIRP commenced on 12.03.2024 and the period of 270 days has already expired on 09.12.2024. on the date of hearing this bench ask about the current status of the CIRP process and came to know that there is still stalemate in the approval of the plan. The period of about 48 days had already expired since the last extension and only 12 days are left in the maximum period of 330 days. The Income Tax Department even after having been specifically directed has still not been able to decide on the plan. CIRP process is a time bound process and cannot be continued for indefinite period for want of appropriate instruction at the end of one of the CoC Member to exercise their vote on the plan.

In view of these facts, we of the considered view the prayer for further extension does not have any merit. However, the Counsel apprised us that some CoC meeting has taken place since the last CIRP date and requested this Tribunal to grant extension so as to regularize those meetings including actions taken in the CIRP process. Considering this we allow the extension in the CIRP process from 10.12.2024 till 26.01.2025. Since in terms of this order the CIRP period would come to an end on 26.01.2025 and there is no Resolution Plan approved by CoC till that time in our considered view the Corporate Debtor is required to be liquidated in view of Section 33(1)(a) of the Code, 2016.

In view of the aforesaid facts and circumstances, the Corporate Debtor i.e. Navmi Steel Traders Private Limited is ordered to be liquidated as a going concern for the first attempt and if it fails, then sale by other methods should be tried.

a. This Bench appoints Mr. Birendra Kumar Agarwal, having Registration No. IBBI/IPA-001/IP-P00564/2017-2018/11040, email id [email protected] and address at; 402, Corporate Annexe, Sonawala Lane Near Udyog Bhavan, Goregaon East, Mumbai City, Maharashtra, 400063 is hereby appointed as the Liquidator as provided under Section 34(1) of the Code.

b. That the Liquidator for conduct of the liquidation proceedings would be entitled to the fees as provided in Regulation 4(2)(b) of the IBBI (Liquidation Process Regulations), 2016.

c. The Liquidator appointed in this case to initiate liquidation process as envisaged under Chapter-III of the Code by following the liquidation process given in the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

d. The Liquidator appointed under section 34(1) of the Code. All powers of the board of directors, key managerial personnel and the partners of the Corporate Debtor, as the case may be, shall cease to have effect and shall be vested with the liquidator.

e. That the Corporate Debtor to be liquidated in the manner as laid down in the Chapter by issuing Public Notice stating that the Corporate Debtor is in liquidation with a direction to the Liquidator to send this order to the ROC under which this Company has been registered.

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

g. That on having liquidation process initiated, 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.

h. This liquidation order u/s 33(7) 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.