M/s Supreme Eximp Private Limited vs M/s Jewel Overseas Private Limited

a) Allow the present application.

b) Pass an order for commencement of the liquidation of the Corporate Debtor namely Jewel Overseas Private Limited as per the provisions of Chapter III of the Insolvency & Bankruptcy Code, 2016, including the following orders/directions:

i. Applicant (Ms. Veenu Drall) be appointed as the Liquidator for the Corporate Debtor. ii. Directions to Liquidator and Registry of NCLT, New Delhi to intimate the Registrar of Companies concerned that this Tribunal has passed an order for liquidation of the Corporate Debtor. iii. Direction that as per Section 33(5), and subject to section 52 of the Code, no suit or other legal proceeding shall be initiated by or against the Corporate Debtor except in relation to transactions notified by the Central Government, provided that a suit or other legal proceedings may be instituted by the Liquidator on behalf of the Corporate Debtor with prior approval of this Tribunal. iv. Direction that all powers of the Board of Directors and key managerial personnel of the Corporate Debtor shall cease to have effect and all such powers shall be vested in the Liquidator.

v. Direct that the personnel of the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as may be required in managing the affairs of the Corporate debtor in discharging his functions as specified under Section 35 of the Code.

c)

Any other order or direction as the Hon'ble National Company Law tribunal may deem fit in the interest of justice.

a)

This Adjudicating Authority vide its order dated 23.05.2023 had initiated the Corporate Insolvency Resolution Process against M/s Jewel Overseas Private Limited ('Corporate Debtor') in C.P.(IB) 883/PB/2022 and appointed Ms. Veenu Drall having IBBI Registration No. IBBI/IPA-001/IP-P02504/2021-22/13816, as the Interim Resolution Professional of the Corporate Debtor.

b)

The IRP made public announcement in FORM A in two newspapers, one in English (Financial Express edition) and another in vernacular language, Hindi (Jansatta) on 31.05.2023 and the last date for submission of claims by creditors was 14.06.2023. On 31.05.2023, the claims were received from one financial creditor and two operational creditors and further verified by the Applicant. The total claims amounting to Rs. 23,57,15,549/- was duly admitted.

c)

Out of the claimants list which consisted of one financial creditor and two operational creditors, CoC was constituted with the following composition:

Sr. No.	Name of Creditor	Vote Share
1.	Punjab National Bank	100
2.	Department of Trade & Taxes, GNCT of New Delhi	0
	Total	100

d)

The first meeting of COC was conducted on 05.07.2023, wherein going-concern prospects of the Corporate Debtor were deliberated by taking note of the assets and liabilities of the business of the Corporate Debtor. In the 2nd CoC meeting dated 24.07.2023, the COC unanimously resolved to publish Form G for inviting expressions of interest from the prospective resolution applicants.

e)

The 3rd meeting of the CoC was held on 02.09.2023 and the CoC was duly informed that in accordance with Form G published on 01.08.2023, two inquiries were received, but none of them submitted their EOI. Furthermore, COC deliberated that since there is no asset or business in the Corporate Debtor and no EOI has been received in response to Form G. Therefore, there is hardly any possibility of getting a resolution for the Corporate Debtor. Accordingly, COC decided not to re-publish form G.

f)

In the 4th CoC meeting dated 05.10.2023, the CoC resolved to initiate liquidation proceedings against the Corporate Debtor in view of no visible prospect of submission of expression of interest for the resolution of Corporate Debtor as there existed some incorrigible issues in relation to the operational viability, no records of Corporate Debtor preceding four years, absence of liquid assets, insufficient documents, no place for business, no plant and machinery for running the company etc.

g)

That the said resolution for initiation of liquidation process of Corporate Debtor was unanimously passed and authorization in favour of the Applicant for filing this present application was resolved as per the terms of the Resolution which stated as follows:

"RESOLVED THAT, the members of the Committee of Creditors hereby approve for liquidation of Jewel Overseas Private Limited ("Corporate Debtor") in terms of section 33(2) of Insolvency and Bankruptcy Code, 2016.

FURTHER RESOLVED THAT, Ms. Veenu Drall, Interim Resolution Professional of the Corporate Debtor is authorized for submission of application before the Hon'ble National Company Law Tribunal for liquidation of the Corporate Debtor in terms of Section 33(2) read with section 60(5) of the Insolvency and Bankruptcy Code, 2016."

h)

The 5th meeting of the CoC was held on 16.10.2023, wherein the CoC in accordance with Regulation 39 C and 39 BA of the CIRP Regulations, 2016, assessed the sale of Corporate Debtor as a going concern and further assessed the compromise and arrangement for the Corporate Debtor. The COC deliberated that there is no business and assets with the Corporate Debtor. Therefore, the Corporate Debtor cannot be sold as a going concern. Further, the COC fixed the fee of the Liquidator in the 5th COC meeting and the said resolution for fixation of fees for the liquidator in accordance with Regulation 39D of the CIRP Regulations, 2016.

i)

Accordingly, the Corporate Debtor should be liquidated under the provisions of Section 33 of the Code. The Resolution Professional stated that there is no option left except that the Corporate Debtor be liquidated because no Resolution Plan has been received for consideration by the CoC. Hence, the present Application.

ANALYSIS

"RESOLVED THAT, the members of the Committee of Creditors hereby approve for liquidation of Jewel Overseas Private Limited ("Corporate Debtor") in terms of section 33(2) of Insolvency and Bankruptcy Code, 2016.

FURTHER RESOLVED THAT, Ms. Veenu Drall, Interim Resolution Professional of the Corporate Debtor is authorized for submission of application before the Hon'ble National Company Law Tribunal for liquidation of the Corporate Debtor in terms of Section 33(2) read with section 60(5) of the Insolvency and Bankruptcy Code, 2016."

"RESOLVED THAT, Committee of Creditors hereby approves for the consolidated professional fees of Rs. 3.5 Lakh payable to the liquidator "Ms. Veenu Drall having IBBI reg. no. IBBI/IPA-001/IPP-02504/2021-2022/13816". In addition, the Liquidator will be entitled for reimbursement of GST and out-of-pocket expenses incurred for conducting the liquidation process."

"(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 creditors to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1)”.

“The Explanation under Section 33(2) has been inserted by Act of 26 of 2019 contains the legislative declaration and intention. The CoC in the Legislative Scheme has been empowered to take decision to liquidate the Corporate Debtor, any time after its constitution and before confirmation of the resolution plan. The power given to the CoC to take decision for liquidation is very wide power which can be exercised immediately after constitution of the CoC. The reasons which has been given in Agenda Item 1, it is made clear by the CoC that the Corporate Debtor is not functioning for last 19 years and all machinery has become scrap, even the building is in dilapidated condition and the CIRP will involve huge costs. We are not convinced with the submission of learned counsel for the Appellant that the CoC’s decision is an arbitrary decision. CoC is empowered to take decision under the statutory scheme and when in the present case the decision of the CoC for liquidation has been approved by the Adjudicating Authority, we see not good ground to interfere at the instance of the Appellant. However, we make it clear that the decision taken by the CoC was in the facts of the present case and it cannot be said that whenever decision is taken for liquidation the same is not open to judicial review by the Adjudicating Authority and this Appellate Tribunal. It depends on the facts of each case as to whether the decision to liquidate the Corporate Debtor is in accordance with the I & B Code or not. With these observations, the Appeal is dismissed”