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Judgment
ORDER
The matter is listed today for pronouncement of the order. The order is pronounced in the open court, vide separate sheet.
The instant Application is filed by Mr. Tejas K Shah, Resolution Professional of Corporate Debtor Bansal Infracon Private Limited, under Section 33 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “Code”) for liquidation of the Corporate Debtor.
This Adjudicating Authority, vide order dated 29.11.2021, had admitted the application filed by Kanada Hiren Mahendrabhai, under Section 9 of Code for initiation of Corporate Insolvency Resolution Process (‘CIRP’) of the Corporate Debtor and appointed Mr. Mr. Tejas K Shah as the Interim Resolution Professional (‘IRP’). Thereafter, Mr. Tejas K Shah was confirmed as Resolution Professional (‘RP’) in the 1stCOC meeting held on 30.12.2021.
It is evident from the record that in compliances of Section 21 of Code read with Rule 6 & 8 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as “CIRP Regulation”), the IRP constituted CoC.
The CoC in its 2nd meeting dated 31.01.2022, resolved to publish Form G. Pursuant to the Resolutions Passed in 2nd meeting, the applicant made public announcement in Form –G for inviting the Resolution plan and published Financial Express (English and Gujarati Language) on 04.02.2022. Further, the last date for submission of EOI was decided as 19.02.2022. The applicant submitted that not any single Expression of Interest form was received.
The CoC in the 3rd meeting held on 02.03.2022 discussed that as there are no assets with the Corporate Debtor, the chance of Resolution is rare. Thus decided to liquidate the Corporate Debtor at the earliest to minimize the CIRP cost and thus decided not to publish expression of interest and invite resolution plan. Thereby, the CoC unanimously resolved to liquidate the Corporate Debtor and also resolved to appoint the Applicant herein Mr. Tejas K Shah bearing registration No. IBBI/IPA-001/IP-P00089/2017-18/10185 as a liquidator under Section 34 (4) of the Code. Further in accordance with Regulation 39D of CIRP Regulations, liquidator’s fee was fixed to the tune of Rs. 25,000/- plus GST per month.
We have carefully heard and considered the arguments of the learned counsel for the RP and have also perused the records. Taking into consideration the above facts in relation to the affairs of the Corporate Debtor, the provisions of Section 33 of Code are as follows:
“33. Initiation of liquidation. –
(1)Where the Adjudicating Authority, -
(a)before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast-track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; Or
(b)rejects the resolution plan under section 31 for the non-compliance of the requirements specified therein,it shall -
(i)pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter;
(ii)issue a public announcement stating that the corporate debtor is in liquidation; And
(iii)require such order to be sent to the authority with which the corporate debtor is registered.
(2)where the resolution professional at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the adjudicating authority of the decision of the committee of creditor approved by not less than sixty-six percent of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clause (i), (ii) and (iii) of clause (b) of Sub-Section (1)”
The Hon’ble National Company Law Appellant Tribunal (‘NCLAT’), in Praveen Kumar Nand Kumar Vs. VSL Securities Pvt. Ltd. in CA No. 1/2020 in CA No. 308/2000, dated 09.06.2020, observed as under: -
“Likewise, the decision of the COC recommending liquidation of the corporate debtor after proper evaluation of the assets and liabilities of corporate debtor with no Resolution Plan forthcoming would be a business decision falling within the domain of commercial wisdom of the COC which is not amenable to judicial review.”
In view of the foregoing, with this, we proceed to pass the following order:
ORDER
We hereby pass the order of liquidation of the Corporate Bansal Infracon Private Limited and allow IA No. 259 of 2022. The liquidation of the Corporate Debtor is effective from the date of this order.
The liquidation of the Corporate Debtor is effective from the date of this order and the Moratorium declared vide order dated 29.11.2021 in CP(IB) No.383/9/NCLT/AHM/2019, henceforth, ceases to exist.
As per the Section 34(1) of the I.B. Code, Mr. Tejas K Shah having Registration No. IBBI/IPA-001/IP-P00089/2017-18/10185 is hereby appointed as a Liquidator of the company, Bansal Infracon Private Limited, who shall complete the liquidation process as per the provisions of Insolvency and Bankruptcy Code, 2016 read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
All the powers of the Board of Directors, key managerial persons, the partners of the Corporate Debtor hereafter cease to exist. All these powers henceforth vest with the Liquidator.
The personnel of the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as may be required by him in managing the affairs of the Corporate Debtor and provisions of Section 19 of the Code shall apply in relation to liquidation process as they apply in relation to CIR process with the substitution of references to the Interim Resolution Professional for references to the Liquidator.
As per Section 33(5) of the Code and subject to Section 52 of the Code, no suit or other legal proceedings shall be instituted by or against the Corporate Debtor, Provided that a suit or other legal proceedings may be instituted by the Liquidator on behalf of the Corporate Debtor, with the prior approval of the Adjudicating Authority;
The provisions of sub-section (5) of Section 33 of the Code shall 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; and
This order of liquidation under Section 33 of the Code 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; and
Registry is directed to upload this order on the official website within maximum two working days from the date of this order. The authenticated copy of this order also to be sent by the registry to Operational Creditor, Corporate Debtor, Registrar of the Company, Resolution Professional cum Liquidator by Speed-post within one week from this order.
Accordingly, the present I.A. No. 354 of 2021 in CP (IB) 383/9/NCLT/AHM/2019 stands disposed of.