In Re: Fanendra H. Munot Vs

B.S.V. Prakash Kumar, J

It is an IA filed u/s 33 of the Insolvency & Bankruptcy Code, 2016 ("the Code") by the Resolution Professional (RP) seeking liquidation order based on the resolution passed by the CoC with 100% voting share.

On perusal of this application, it appears that this CP/1569/MB/2017 was admitted on 20.11.2018, thereafter, IRP on 21.11.2018 caused public announcement for submissions of the claims against the Corporate Debtor, pursuant to which, the IRP received claim from only one financial creditor, namely Andhra Bank, for there being no other claimant other than Andhra Bank, the COC has been constituted with the sole financial creditor, consequent thereto, in the first CoC dated 23.01.2019, the Applicant was appointed as the Resolution Professional. It is also evident that in 3rd CoC meeting held on 11.02.2019, it was decided to issue invitation for Expression of Interest and Form-G was published on 09.05.2019 in newspapers for inviting resolution applicants. For nobody came forward with Expression of Interest, except suspended directors of the Debtor Company with an OTS settlement, the CoC not being satisfied with the proposal of the suspended directors, it has rejected the proposal. Since no applicant came forward with Eol within the CIRP period of 180 days from date of commencement of CIRP, i.e., 19.05.2019, the Applicant on 02.05.2019 called for 4th CoC meeting, wherein, it was resolved for extension of CIRP period by another 90 days, so that another invitation could be made, in pursuance thereof, CIRP period was extended for another 90 days with effect from 20.05.2019. As there was no progress despite extension given, the CoC has resolved to liquidate the Corporate Director and directed the Applicant to file Application u/s 33 of the Code.

On the objection of the Operational Creditor who filed this Company Petition stating that the Resolution Professional sent mail stating that his claim was already paid by the Corporate Debtor, the Resolution Professional has clarified it saying that it was sent at the time of verification but thereafter the RP has admitted whatever claim that was made by the said Operational Creditor and the same is still showing as claim against the Corporate Debtor.

The learned Counsel for the Resolution Professional further submitted that the applicant to continue as a liquidator, CoC passed Resolution approving the RP to act as a Liquidator and in pursuance thereto, the RP has given his written consent. As the CoC has failed to receive Eol despite their best efforts, I am of the view that this case is fit for ordering liquidation with the following directions:

a) This Bench hereby orders the Corporate Debtor to be liquidated in the manner as laid down in the Chapter by issuing a public notice stating that the Corporate Debtor is in liquidation with a direction to the liquidator to send this order to ROC with which this company has been registered.

b) The Resolution professional viz Mr. Fanendra H. Munotis is hereby appointed to act as Liquidator for the purpose of liquidation of the corporate debtor, therefore all powers of the board of directors, Key managerial personnel and partners of the Corporate Debtor, as the case may be, shall cease to have effect and hereby vested in the liquidator. The Personnel of the Corporate Debtor are directed to extend cooperation to the liquidator as may be required in managing the affairs of the Corporate Debtor. The Insolvency Professional appointed as liquidator will charge fees for conduct of the liquidation proceedings in proportion to the value of the liquidation estate assets as specified under regulation 4 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the same shall be paid to the Liquidator from the proceeds of the liquidation estate under section 53 of the Code.

c) Since this liquidation order has been passed, no suit or other legal proceedings shall be instituted by or against the Corporate debtor without prior approval of this Adjudicating Authority save and except as mentioned in subsection 6 of section 33 of the Code.

d) This liquidation order shall be deemed to be notice of discharge to the officers, employees and workmen of the Corporate Debtor except to extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator.

e) The liquidator is directed to carry the functions of the Liquidator as envisaged under the Insolvency and Bankruptcy Code, 2016 and also Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

Accordingly, this unnumbered Interlocutory Application filed in CP/1569/MB/2017 is hereby allowed.