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Judgment
The instant application is filed under section 33(2) r.w 34(1) of the IB Code.
The notice was issued to the Suspended Management vide order dated 23.02.2021 and the same is delivered on 02.03.2021, however, none appeared.
It is a matter of record that the C.P.(I.B) No. 40/2019 was admitted on 14.10.2020. In view of such admission the IRP, Mr. Kailash T Shah is appointed and thereafter, he was confirmed as RP in first COC meeting held on 12.11.2020. Since, there are no assets with the Company, resolution in connection with publication of Form G and conducting transaction audit is rejected. The COC in its 2nd meeting held on 08.01.2021 passed the resolution for liquidation of the Corporate Debtor with 100% voting and authorised the RP to file the application under section 33 of the IB Code. The Minutes of 2nd Meeting of the COC is annexed at Annexure-F, at page no. 46-53.
On perusal of the Minutes of Meeting, it is found that Mr. Shyamsunder Gupta and Mr. Sandeep Shivkumar Goyal on behalf of Suspended Management were present. There is 100% voting of the COC in favour of the liquidation.
The Learned PCS appeared on behalf of the RP fairly submitted that the written consent of the RP to act as liquidator is annexed at Annexure-G at page no. 54.
In view of the above situation, it is also pertinent to mention herein that recently the Hon'ble Supreme Court of India in its judgement passed in Civil Appeal No.8766-67 of 2019- Committee of Creditors of Essar Steel India Limited through Authorised Signatory vs. Satish Kumar Gupta &Ors observed as follows:
The commercial wisdom of the Committee of Creditors cannot be interfered into by the Adjudicating Authority. The Hon'ble Supreme Court affirmed K. Sashidhar's judgement that neither the Adjudicating Authority nor the Appellate Authority has been endowed with the jurisdiction to reverse the commercial wisdom of the CoC.
The Hon'ble Supreme Court took the view that the commercial wisdom has been exercised by the CoC after taking into count all the factors leading to maximisation of asset value of the Corporate Debtor, but the ultimate discretion of what to pay and how to pay each class or sub-class of creditors lies with the CoC.
Under the facts and circumstances as narrated above, we pass the following orders:
The moratorium declared under Section 14 of the IB Code shall cease to have effect from the date of the order of liquidation.
The Liquidator is further directed to issue public announcement stating that the Corporate Debtor is in liquidation.
The Liquidator is required to send certified copy of this order to the authority with which the Corporate Debtor is registered.
Subject to Section 52 of the IB Code, no suit or other legal proceedings shall be instituted by/or against the Corporate Debtor. However, a suit and other legal proceedings may be instituted by the Liquidator, on behalf of the Corporate Debtor, with the prior approval of this Authority.
This Authority makes it clear that para (d) hereinabove shall not apply to legal proceedings in relation to such transactions as notified by the Central Government in consultation with any financial sector regulator.
The 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.
All the 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 Company Liquidator. In addition to this, the Company Liquidator shall exercise the powers and duties as enumerated in Sections 35 to 50, 52 to 54 of the IB Code, 2016, read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
The personnel of the Corporate Debtor shall extend all assistance and co-operation to the Liquidator as may be required by him in managing the affairs of the Corporate Debtor.
The Company Liquidator shall be entitled to charge such fee for the conduct of the liquidation proceedings in such a proportion to the value of the liquidation estate assets as may be specified by the Board.
The Registry is directed to communicate this order with immediate effect to the concerned Registrar of Companies, registered office of the Corporate Debtor and Company Liquidator for information and compliance
Hence, the application so filed by the RP is allowed and in the circumstances, the Adjudicating Authority passes an order for liquidation of the Corporate Debtor under Section 33 of the IB Code, 2016. Mr. Kailash T Shah, RP having Registration Number IBBI/IPA-001/IP-P00267/2017-18/10511 is appointed as the Liquidator for the purpose of liquidation of the Corporate Debtor.
Accordingly, the instant IA stands disposed of with the above observations.