IDBI Bank Ltd vs Pawar Electro Systems Pvt Ltd

The Corporate Debtor was placed under CIRP vide short order dated 06.09.2019, on an Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by IDBI Bank Limited being the Financial Creditor and Mr. Girish Siriram Juneja was appointed as Interim Resolution Professional of the Corporate Debtor on the same day.

It is submitted that the short Order dt. 06.09.2019, passed in the Company Petition bearing CP (IB) No. 1587 of 2019, was published on the NCLT Website on 24.09.2019 and a certified copy was obtained by the representative of IDBI Bank being the Applicant in the said matter and provided to the Interim Resolution Professional on 26.09.2019. It is further submitted that the detailed order was sent to the Interim Resolution Professional through Registry of this Tribunal by E-mail only on 12.10.2019.

Thereafter, the Interim Resolution Professional has published the public announcement in FORM A as per section 13 and section 15 of the Insolvency & Bankruptcy Code, 2016, in Two Newspapers on 27.09.2019 (i.e. after he found the order of the Hon’ble NCLT Mumbai Bench uploaded on the NCLT Website on 24.09.2019). Subsequently, the Interim Resolution Professional has been confirmed as the Resolution Professional of the Corporate Debtor.

Further, Resolution Professional has published the Expression of Interest (“EOI”) in FORM G in three (3) newspapers (i.e. in Business Standard (Mumbai Edition) - English Newspaper, Free Press Journal (Mumbai Edition) - English Newspaper and Navshakti- (Mumbai Edition) - Marathi Newspaper). As per the Form G the last date for submission of EOI was 22.12.2019.

Since no EOI had been received till the last date, RP informed the members of the Committee of Creditors that the last date for receiving the EOI was 22.12.2019, and since no EOI was received till 21.12.2019 and 22.12.2019 being a Sunday, the Resolution Professional had sought an approval from the members of Committee of Creditors by an email dt. 21.12.2019 for the extension of EOI by 15 days. Therefore, a corrigendum was published on 23.12.2019 in the Free Press Journal, and Navshakti (Regional Language) newspapers. The revised Form G was updated on the website of the Corporate Debtor.

On 07.01.2020, Resolution Professional suggested for further extension till 23.01.2020; since, no EOI had been received. The members of Committee of Creditors approved to extend the last date for submitting the expression of interest till 23.01.2020. The corrigendum for extension of the last date of submitting the expression of interest was published on 09.01.2020 in Business Standard, Free Press Journal and Navshakti newspapers.

It is submitted that after publication of the EOI in FORM G the Resolution Professional was approached by 4 potential Resolution Applicants namely, Rare Asset Reconstruction Limited, Godrej & Boyce Mf. Co. Ltd., Neesha Electronics- Through Individual Mr. Bhagwat Narhar and Invent Assets Securitisation & Reconstruction Private Limited, who showed their interest in submitting the Resolution Plan for the Corporate Debtor.

Finally, the Resolution Plan submitted by M/s. Neesha Electronics was considered and put for voting by before the Committee of Creditors. The resolution plan submitted by M/s Neesha Electronics- Through Mr. Bhagwat Narhar, after due deliberation and after giving sufficient opportunity for revisions of the plan the same was to be considered by the Committee of Creditors in their 19^th meeting dated 14.07.2021 and accordingly the plan was put for voting before the Committee of Creditors. The last date for voting on the plan was 23.07.2021. Pursuant to the voting results on the Resolution Plan, it is clear that the Committee of Creditors have rightly rejected the Resolution Plan with 100% voting against the Resolution Plan.

It is to be noted that the present Interlocutory Application was listed on Board on 28.06.2022, on which date the Bench has observed that as to what majority; the Committee of Creditors has approved the proposal of putting the Corporate Debtor into Liquidation and directed the Committee of Creditors to convene the meeting afresh and place on record minutes of the meeting approving the Resolution for putting the Corporate Debtor into Liquidation.

Pursuant to the directions of this Bench dt. 28.06.2022, Resolution Professional of the Corporate Debtor has conveyed the said directions to the members of the Committee of Creditors and convened a meeting thereof specifically to pass the Resolution to initiate the Liquidation against the Corporate Debtor. xi. Accordingly, the Resolution Professional of the Corporate Debtor has filed an Affidavit on 18.07.2022, stating that the Committee of Creditors in their 22^nd meeting held on 14.07.2022, have passed a Resolution for approving the Liquidation of the Corporate Debtor. The Resolution passed in the said meeting is reproduced below for the convenience:

The Corporate Debtor (i.e. Pawar Electro Systems Pvt. Ltd.) shall be liquidated in the manner as laid down in Chapter-III of the Code.

Mr. Girish Siriram Juneja, an Insolvency Professional (IBBI Registration No. IBBI/IPA-001/IP-P00999/2017-18/11646, is appointed as the Liquidator of the Corporate Debtor.

He shall issue public announcement stating that Corporate Debtor is in liquidation.

The Moratorium declared under Section 14 of the IBC 2016 shall cease to operate here from.

Subject to section 52 of the IBC 2016 no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

All powers of the Board of Directors, Key Managerial Personnel and partners of the Corporate Debtor shall cease to have effect and shall be vested in the Liquidator.

The liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code, read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016.

Personnel connected with the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs.

The fees payable to the Liquidator shall be in accordance with Regulation 4 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

The Liquidator shall submit progress reports as per Regulation 15 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

The Liquidator is hereby Authorized to represent the Corporate Debtor before the Government Authorities, if need be.

This Order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the liquidation process by the Liquidator.

Copy of the Order shall be furnished to the Insolvency and Bankruptcy Board of India, to the Regional Director (Western Region), Ministry of Corporate Affairs; Registrar of Companies & Official Liquidator, Maharashtra, the Registered Office of the Corporate Debtor; and the Liquidator.

With the aforesaid observations the Interlocutory Application bearing IA No. 1946 of 2021, stands disposed of as Allowed. Order Accordingly.