Prayag Polytech Private Limited vs Propyl Packaging Limited

Per: Ashok Kumar Borah, Member (Judicial)

this Interlocutory Application has been filed under Section 33(1) of IBC, 2016 by Mr.George Varkey, Resolution Professional in the matter of M/s. Propyl Packaging Limited seeking the following reliefs: -

The facts in brief are as under: -

This Tribunal vide order dated 17.02.2020 in IBA/52/KOB/2019 admitted the application filed by M/s. Prayag Polytech Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor, M/s. Propyl Packaging Limited and appointed the Applicant as the Interim Resolution Professional. In the second meeting of Committee of Creditors (CoC) held on 03.08.2020, COC appointed the Applicant as the Resolution Professional("RP"). On 20.02.2020 the Applicant made public announcement in Form-A inviting claims from the Creditors.

It is stated that vide order dated 10.11.2020 in MA/169/KOB/2020 this Tribunal granted exclusion of 192 days from the CIRP period i.e., from 23.03.2020 to 30.09.2020 in view of lock down imposed by the State and Central Governments. Though the RP has received Expression of Interest from two Prospective Resolution Applicants, they did not submit the Resolution Plan. Hence the Committee of Creditors in its meeting held on 01-01-2021 resolved to invite further Expression of Interest. Accordingly, revised Form-G was published on 03.02.2021. It is stated that pursuant to the Expression of Interest invited on 03.02.2021 Resolution Applicant has received expression of Interest from the following two Prospective Resolution Applicants (PRAs):

It is further stated that since 180 days period for completing the CIRP was expiring on 20.02.2021, Committee of Creditors in its meeting held on 03.02.2021 resolved to seek extension of further 90 days to complete the CIRP from this Tribunal under Section 12(2) of the Insolvency and Bankruptcy Code, 2016. This Tribunal vide order dated 18.02.2021 in IA(IBC)/50/KOB/2021 granted extension of further 90 days to complete the CIRP and permitted the Applicant to complete the CIRP by 23.05.2021. Both the Resolution Applicants did not submit the Resolution Plan on the last date of submission of the Resolution Plan and requested time for submitting Resolution Plan. But again, the CoC in its 9th meeting held on 24.02.2021 decided to invite fresh EOIs. Accordingly, revised Form-G was published on 25.02.2021. In response to the revised EO1, the applicant received expression of interest from the following three Prospective Resolution Applicants:

It is also stated that since the Promoter Mr. Rajesh K.S submitted the EOI in the name of the Corporate Debtor and was not meeting the net worth criteria, the Applicant rejected the EOI submitted by Mr. Rajesh K.S. Aggrieved by the said rejection, the promoter of the Corporate Debtor filed an Interlocutory Application No. IA(IBC)/64/KOB/2021 before this Tribunal for a direction to the Resolution Professional and CoC for relaxing the eligibility criteria and also for a direction to the RP to accept his EOI and for Registration of Corporate Debtor as an MSME. This Tribunal vide its order dated 20.04.2021 allowed the Application filed by the Promoter. Pursuant to the said order, the Applicant issued the RFRP to the Promoter on 29.04.2021 and the Promoter submitted the revised EOI on 03.05.2021. Again, the, Promoter filed an Interlocutory Application i.e., IA([BC)84/KOB/2021 seeking further 30 days to submit the Resolution Plan on the ground that PRA is entitled to 30 days for filing the Resolution Plan under Regulation 36B of IBBI (Corporate Insolvency Resolution Process) Regulations, 2016. This Tribunal after considering the said application vide order dated 31.05.2021 directed the Promoter to file the Resolution Plan within one week from the date of receipt of the order. It is stated that the order was received by mail on 02.06.2021.

It is further stated that despite granting sufficient opportunity to the Promoter, he has not submitted the Resolution Plan. The other two PRAs also not submitted the Resolution Plan. Accordingly, the Applicant has convened the meetings of CoC on 11.06.20201 and 16.06.2021 for initiating Liquidation Process. However, in view of lock down the financial creditors were not in a position to take decision on Liquidation Process. Hence the meeting was adjourned to 18.06.2021 and then to 25.06.2021. On 25.06.2021, the CoC in its 11^th meeting resolved to approve the filing of an application before this Tribunal for Liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code and recommended the name of Applicant for appointment as the Liquidator. The Committee with 100% voting rights passed the following resolution:-

Hence, the Applicant has filed this IA with the aforesaid prayers.

On 14.07.2021 this Tribunal directed the Resolution Professional to submit the Balance Sheets, assets and liabilities and Income and Expenditure account of the Corporate Debtor for the Financial Years 2014-2015, 2015-2016, 2016-2017, 2017-2018 with a comparative chart. We have perused the compilation of the Balance Sheets and Profit and Loss Accounts filed by the Applicant.

The consent of the Resolution Professional in accepting appointment as the Liquidator of the Corporate Debtor has been produced. In aforesaid consent the Applicant certified that there are no disciplinary proceedings pending against him with the Board or Indian Institute of Insolvency Professionals of Institute of Chartered Accountants of India where he is a member.

This Tribunal heard the learned counsel appearing for the Resolution Professional as also the learned counsel who appeared on behalf of the Promoter and had gone through all the case records.

Upon perusal of the documents, and records made available and hearing the submissions of the learned counsel for the Applicant. It is seen that in the 11^th CoC meeting held on 26.05.2021, the CoC with majority of 100% voting rights approved to apply before the Adjudicating Authority for liquidation of the Corporate Debtor under section 33 (2) of the IBC.

In view of the resolution of the CoC, we are inclined to allow the IA(IBC)/ 106/KOB/2021 in IBA/52/KOB/2019 to initiate liquidation process against the Corporate Debtor. Accordingly, the Adjudicating Authority Orders for initiation of Liquidation of the Corporate Debtor, in the following observations: -

With the above orders, IA (IBC)/106/KOB/2021 is disposed of.