IDBI Bank Ltd. vs Abhijeet Integrated Steel Limited

Per: Bidisha Banerjee, Member (Judicial)

This court convened via hybrid mode.

I.A. (I.B.C) No. 1703/KB/2023 is an application filed praying for liquidation of the Corporate Debtor.

This Adjudicating Authority vide its order dated 31 March 2023 directed initiation of the Corporate Insolvency Resolution Process ('CIRP') of Abhijeet Integrated Steel Limited ("Corporate Debtor"), on a Petition filed by IDBI Bank("Financial Creditor") against Abhijeet Integrated Steel Limited under section 7 of the Insolvency and Bankruptcy Code, 2016 ('the Code') and appointed Mr. Kamlesh Kumar Singhania as the Interim Resolution Professional ('IRP').

In terms of section 15 of the Code, public announcement was made and the Committee of Creditors ("CoC") was formed with viz. Jammu and Kashmir Bank ltd., Bank of Maharashtra, Karur Vaisya Bank Ltd, IDBI, Bank Ltd. and Bank of India

In the CoC meeting held on 28 April 2023, the CoC appointed Mr. Kamlesh Kumar Singhania as the Resolution Professional with voting share 82.26%. The said Appointment was recorded by the Hon'ble Tribunal in its order dated 09.05.2023.

The Resolution Plan of Orissa Metaliks Pvt Ltd. was opened before the CoC at 9th CoC meeting held on 05.09.2023. The report of the RP on Resolution plan was placed before the CoC at the 10 meeting held on 31.09.2023. While examining the Resolution plan the RP observed that the projection required to evaluate feasibility and Viability were not submitted by the Resolution Applicant. The RP informed the Resolution Applicant about the said deficiency and requested him to provide the same. However, the Resolution Applicant did not provide any documents. Therefore, the Plan fails to comply with the Mandatory requirement as stipulated in regulation 38(3)(b) and (c) of the CIRP Regulations,2016.

This is an application filed by RP seeking liquidation of the Corporate Debtor, viz., Abhijeet Integrated steel Limited, on the ground that there is no scope of resolution, especially in the view of the fact there is no compliant plan received during CIRP.

The Applicant has sought for the following reliefs:

We have considered the submission made by the Ld. Counsel and perused the record.

Section 33(1) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor when there is a contravention of the approved Resolution Plan. However, even before approval of the plan, Resolution failed due to reason mentioned in para of this order.

Hence, we do find merit in the prayers made in I.A. (I.B.C) No. 1703/KB/2023, and deem it fit to order liquidation of the Corporate Debtor.

This Bench, therefore, hereby orders as follows: -

a. Prayers as sought for in I.A. (I.B.C) No. 1703/KB/2023 filed by RP, is allowed and Abhijeet Integrated steel Limited., the Corporate Debtor is ordered to be liquidated in terms of section 33(1) of the Code;

b. Rachna Jhunjhunwala, CA having registration no. IBBI/IPA-001/IP-P00389/2017-18/10707, is hereby appointed as Liquidator is hereby appointed as Liquidator as provided under section 34(1) of the Code subject to a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which she is a professional member,

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 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.

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 Applicant is registered. Additionally, the Registry shall also forward a copy of this Order to the Registrar of Companies, Maharashtra.

The application bearing IA (I.B.C) No. 1703/KB/2023 shall stand disposed of in accordance with the above directions.

List the main CP (IB) No. 455/KB/2018 for reporting progress on 23.04.2024.

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.