ICICI Bank Limited vs Mercator Limited & Anr

The above application is filed by Mr. Girish S. Juneja, Resolution Professional, (hereinafter referred to as the “Applicant”) seeking Liquidation of Mercator Limited (hereinafter referred to as the “Corporate Debtor”) under Section 33(1)(a)(i) of the Insolvency and Bankruptcy Code, 2016 (hereinafter called as “Code”), praying for following reliefs:

The brief facts of the Application are as follows:

A. That this Tribunal vide order dated 08.02.2021 in Company Petition No. 4404 of 2019 admitted the Petition under Section 7 of the Code, filed by ICICI Bank Limited (hereinafter referred to as the “Financial Creditor”) and Corporate Insolvency Resolution Process (hereinafter referred to as the “CIRP”) was initiated against Mercator Limited (hereinafter referred to as the “Corporate Debtor”). In terms of the said order, the Applicant was appointed as the Interim Resolution Professional, (hereinafter referred to as the “IRP”) of the Corporate Debtor.

B. The Applicant submits that the Public Announcement was published in Form A in terms of Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"), intimating public at large regarding the initiation of Corporate Insolvency Resolution Process (CIRP) with respect to the Corporate Debtor and seeking claims from the creditors of the Corporate Debtor. Thereafter, during the 1^st COC Meeting held on 10.03.20221, the Committee of creditors confirmed the Applicant as the Resolution Professional.

C. The Applicant submits that the following actions were taken by him pursuant to his appointment as IRP under provisions of the Code:

D. The Applicant submits that on 01.02.2022 the 270-day CIRP period ended which is pursuant to the exclusion of 88 days (04.04.2021 to 30.06.2021) allowed by the Hon'ble Tribunal vide its order dated 09.08.2021 and extension of 90 days granted by the Hon'ble Tribunal vide its order dated 11.11.2021 (w.e.f 04.11.2021)

E. Further, the Applicant after the authorisation by the COC members on 19.01.2022, filed an Interlocutory Application bearing no. No.238 of 2022 under Section 60(5) of IBC, 2016, read with Regulation 40C of the CIRP Regulations, 2016, seeking exclusion of five weeks from 28.12.2022 to 31.01.2022, on the ground of third wave of Covid-19. The Applicant requested for an exclusion as this would enable the COC members adequate time to vote upon the said plans. The said IA No.238/2022 was listed for hearing on 07.02.2022, which was subsequently declared a public holiday by the state government, with the hearing adjourned to 14.03.2022.

F. In the interim, at the 12^th adjourned meeting of the CoC held on 08.02.2022, the CoC members decided to extend the voting time by 15 days and accordingly authorized the Applicant to seek additional exclusion / extension of CIRP period from the Hon'ble Adjudicating Authority. The resolution to this effect was approved by financial creditors representing 96.60% of the voting share.

G. The said I.A. No. 638/2022 was listed for hearing on 14.03.2022 along with I.A. No.238/2022. However, all IAs were adjourned to 04.05.2022. The Applicant submits that he had forwarded / submitted three resolution plans received from Deep Industries Ltd, Paramone Concepts Ltd and Castle Ships Pvt Ltd to the COC for their consideration and voting. The e-voting in respect of the same was concluded on 22.03.2022 at 8:00 p.m. and the results were circulated to the members of the COC on 23.03.2022. The voting results with respect to the Resolution Plans is as under:

The Applicant states that as it is evident from the above, none of the resolution plans received plans adequate voting share. Accordingly, in terms of the second proviso to Regulation 39(3B) of the CIRP Regulations, the plan which received the highest voting share was put for re-voting, as discussed at the 14^th CoC meeting held on 29.03.2022 and 01.04.2022. Section 39(3B) is reproduced hereunder for ease of reference:

H. The Applicant further submits that the e-voting with respect to the aforementioned resolution ended at 8 p.m. on 05.04.2022. The COC members once again failed to approve the resolution plan of (Deep Industries Ltd) with the requisite majority of 66% voting share. The e-voting results is extracted below for ready reference:

I. That in view of the above, the Resolution Professional submits that since no Resolution Plan has been approved by the COC within the Corporate Insolvency Resolution Process period, he is constrained to approach the Hon'ble Adjudicating Authority for appropriate directions/ orders under the provisions of the Code, seeking Liquidation of the Corporate Debtor and, hence, this application.

J. Heard the counsel appearing for the Resolution Professional and perused the record. Considering the above facts and circumstances, the COC rejected the Resolution Plan which was put to re-vote in the 14^th COC meeting held on 29.03.2022 and no other Resolution Plan was approved with the requisite majority of voting share, also the substantial time for the CIRP has exhausted including all the extension period granted by this Tribunal to the Applicant at various stages of the CIRP. Therefore, this Bench feels there is no option except to put the Corporate Debtor Company into Liquidation as a going concern as per the Code as well as also to protect the asset of the Corporate Debtor from further deterioration. Since, no Resolution Plan has been approved by the COC with a requisite majority as envisaged under the Code, this Tribunal has very limited judicial review in such matters of commercial wisdom. In view of the above facts, this Bench feels that this is a fit case for ordering Liquidation as a going concern of the Corporate Debtor. The Counsel appearing for the Applicant also prayed to appoint Mr. Girish S. Juneja (Regn No: IPA-001/IP-P00999/ 2017-2018/11646), Resolution Professional, to act as the Liquidator.

K. Accordingly, the Interlocutory Application Number 959 of 2022 is allowed directing Liquidation of the Corporate Debtor as a going concern. Accordingly, we pass the following:

The above I.A. No. 959 of 2022 is allowed and the Corporate Debtor, Mercator Limited is ordered to be liquidated as a going concern.

a. Mr. Girish S. Juneja (Regn No: IPA-001/IP-P00999/ 2017-2018/11646) and having office at 22 Dignity Apartments, Bon Lane, 7 Bungalows, Versova, Andheri (W) Mumbai: 400 053 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 will have 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. All the powers of the Board of Directors, Key Managerial Persons, the Partners of the Corporate Debtor hereafter ceased to exist. All these powers henceforth vest with the Liquidator.

g. 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.

h. 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.

j. The Registry is directed to communicate this order to the Liquidator

With the above directions, this application i.e. I.A. No. 959 of 2022 is hereby allowed and disposed of.