Marotia Steel Traders Pvt. Ltd. vs S. B. Ispat (India) Private Limited

Per: Rohit Kapoor, Member (Judicial)

This Adjudicating Authority convened through hybrid mode.

IA(IBC)/612(KB)2022 is an application filed by the Resolution Professional of S. B. Ispat (India) Private Limited, the Corporate Debtor, praying for liquidation of the Corporate Debtor. This application is duly supported by an affidavit^{11.At pages 22 to 25 of the application} affirmed by Mr. Nitin Daga, RP.

This Adjudicating authority vide order^{22.Annexure – “A” at pages 26 to 35 of the application} dated 07/01/2022 in CP(IB)/1270(KB)2019 had ordered initiation of CIRP against the Corporate Debtor and appointed Mr. Nitin Daga as the Interim Resolution Professional (IRP). The said order was duly received by the IRP on 08/01/2022.

In terms of regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (in short, Regulations 2016), Public Announcement^{33.Annexure – “B” at pages 36 to 38 of the application} in Form A was published on 10/01/2022 in “Financial Express” (English) and “Aajkal” (Bengali). Committee of Creditors (“CoC”)^{44.Averment in paragraph IV(3) at page 12 of the application} was duly constituted on 29/01/2022. The CoC at its 1st meeting held on 04/02/2022 had confirmed the appointment of the IRP as the Resolution Professional (RP)^{55.Averment in paragraph IV(4) at page 12 of the application}. Altogether four CoC meetings were held by the IRP/RP. Copy of the minutes^{66.Annexure – “C” at pages 39 to 51 of the application} of the 1^st CoC meeting held on 04/02/2022 is annexed as “Annexure C” to the application.

As per regulation 36A(1) of the said Regulations 2016 and with the approval of the CoC, Form G^{77.Annexure – “E” at pages 61 to 63 of the application} was published in “Financial Express” (English) and “Aajkal” (Bengali) in Kolkata Edition on 23/03/2022 inviting Expression of Interest (in short “EoI”) from prospective resolution applicants. The said Form G was also uploaded in the website of IBBI. However, no EoI has been received till the last date of submission of EoI from any prospective resolution applicant. Copy of the minutes^{88.Annexure – “D” at pages 52 to 60 of the application} of the 2^nd CoC meeting held on 21/03/2022 is annexed as “Annexure D” to the application.

The applicant, however, had received a cheque, late evening on 07/04/2022 (last date of submission of EoI), from one Mr. Bikash Sharma, erstwhile director of the Corporate Debtor for submission of EoI and the same could not be considered because of the reason that cheque was not the specified mode of payment for submission of EoI, as mentioned in the EoI documents. Above facts have already been brought to the notice of the CoC members.

At the 3^rd CoC meeting held on 19/04/2022, the applicant informed the CoC members that he had received a few requests from some of the prospective resolution applicants and the promoters for extension of time for submission of EoI and had requested members of the CoC to consider the said requests of the prospective resolution applicants. However, such request was dissented by the members of the CoC since they do not expect resolution / revival of the Corporate Debtor and extension of time for submission of EoI may be a phishing one and waste of time. Therefore, the CoC at the said 3^rd CoC meeting placed Agenda Item No. 13, which is placed at page 71 as follows:

At the 4^th CoC meeting held on 31/05/2022, the CoC has passed resolutions as per the relevant provisions of the IBC prior to the commencement of liquidation proceedings of the Corporate Debtor. The RP has also submitted his consent to act as Liquidator of the Corporate Debtor. Copy of the minutes of the 4th CoC meeting^{1010.Annexure G at pages 76 to 87 of the application} held on 31/05/2022 along with the voting sheet and Consent Letter of the RP are annexed as “Annexure G” (Collectively) to the application.

Meanwhile, the 180 days CIRP had expired on 05/07/2022.

Section 33(1)(a) of the Code mandates that the Adjudicating Authority shall pass an order of liquidation where no resolution plan is received before the expiry of the CIRP. Sub-section (2) thereof requires the Adjudicating Authority to pass the liquidation order where the Resolution Professional intimates to the Adjudicating Authority the decision of the Committee of Creditors approved by not less than 66% of the voting share to liquidate the Corporate Debtor.

On conjoint reading of these two provisions, this Adjudicating Authority is left with no option but to order liquidation of the Corporate Debtor.

This Bench, therefore, hereby orders as follows: -

The application bearing IA(IBC)/612(KB)2022 shall stand disposed of in accordance with the above directions.

CP(IB)/1270(KB)2019 is to come up for filing of periodical progress report on 04/01/2023.

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.