Satyaprakash Agarwal and Ors. vs Vistar Metal Industries Private Limited

Per: Shyam Babu Gautam, Member Technical

This is an Application under Section 33 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called “the Code”) by Mr. Sunil Kumar Agarwal, Resolution Professional (RP) of Vistar Metal Industries Private Limited seeking orders for Liquidation of the Corporate Debtor.

On perusal of this Application, it is evident that the Company Petition No. 1331 of 2017 filed by the Financial Creditor under Section 7 of the Code was admitted by this Tribunal vide an Order dated 14th October 2019 and one Mr. Atul Jain was appointed as the Interim Resolution Professional (IRP). A Public announcement dated 29th November 2019 was made pursuant to Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter called “CIRP Regulations”) inviting the creditors of the Corporate Debtor to file their claims before the IRP. Subsequently, the Committee of Creditors (CoC) was constituted and the IRP was appointed as the Resolution Professional (RP) of the Corporate Debtor in the First CoC Meeting held on 24th December 2019.

The Applicant submits that the CoC decided to change the RP and passed a resolution to appoint the present Applicant as the new RP during the 10th Meeting of the CoC held on 15th June 2021. Accordingly, the Applicant was confirmed as the RP of the Corporate Debtor by this Tribunal vide Order dated 2^nd August 2021. The Applicant further submits that two registered valuers were appointed during the course of the CIRP for the purpose of valuation of the assets of the Corporate Debtor. The reports of the same have been attached to this Application.

4. The Applicant submits that an Expression of Interest (“EoI”) was issued by the Applicant on 29^th January 2020 wherein the last date for submission of resolution plans was fixed as 29^th March 2020. Subsequently, EoIs were received from 5 parties and resolution plans were received from three prospective resolution applicants namely, Regency Ispat Private Limited, Guardian Castings Private Limited and Manohar Manak Alloys Private Limited. Thereafter, during the 15^th CoC Meeting held on 5^th October 2021, the Applicant placed the Resolution plans of Guardian Castings Private Limited and Manohar Manak Alloys Private Limited before the CoC for e-voting, both of which stood rejected by the CoC since the plans offered were far below the liquidation value. The Resolution plan proposed by Regency Ispat Private Limited was not put for voting as they failed to deposit the Earnest Money Deposit despite several communications.

5. Consequently, in the 16^th CoC Meeting held on 23^rd October 2021, since both Resolution plans were rejected, the CoC decided to initiate liquidation of the Corporate Debtor and directed the RP to file an appropriate Application before the Tribunal. The CoC passed the following resolution with 89% majority voting share:

The Applicant further submits that Mr. Vipin Agarwal, Suspended Promotor Director of the Corporate Debtor filed I.A. No. 192 of 2022 opposing the instant Application filed by the Applicant RP on the ground that the Corporate Debtor being an MSME, he was not barred under Section 29A read with Section 240A of the Code for proposing a Resolution plan. This Application was allowed by this Tribunal vide Order dated 6th January 2023 and in compliance with the said order, a re-valuation of the assets of the Corporate Debtor was conducted and the Resolution plan proposed by the Suspended Director was placed before the CoC by the Applicant for e-voting during the 25th CoC Meeting held on 10th March 2023. The said plan was also rejected by the CoC and therefore, the Applicant pressed the present Application seeking liquidation of the Corporate Debtor. A copy of the minutes of the 25th CoC Meeting along with e-voting results has been duly annexed to the present Application.

On perusal of the Application and the documents annexed, we note that the CoC has rejected the resolution plans placed before it and is left with no other alternative than to initiate the liquidation of the Corporate Debtor. Looking at the averments and submissions of the Applicant, we are of the considered opinion that this is a fit case for liquidation and, therefore, we hereby order the Liquidation of the Corporate Debtor with directions as follows:

The I.A. No. 2623 of 2021 filed by the RP for Liquidation of the Corporate Debtor stands allowed.