Edelweiss Asset Reconstruction Co Ltd vs Shri Shyam Sundar Rathi & Anr

IN THE MATTER OF: Edelweiss Asset Reconstruction Co. Ltd. ... Appellant

Versus

Shri Shyam Sundar Rathi & Anr. ...Respondents

Present: For Appellant : Mr. Arun Kathpalia, Senior Advocate with Mr. R. P. Agarwal and Ms. Manisha Agarwal, Advocates For Respondents : Mr. Shyam Rathi, Resolution Professional

ORDER

(Through Virtual Mode)

14.08.2020 Appellant is aggrieved of the impugned order passed by the

Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench on

1st July, 2020 by virtue whereof the Adjudicating Authority has directed

Resolution Professional to produce details of assets of the 'Corporate Debtor'

along with the valuation report by two valuers within four weeks. This appears

to have been done purportedly for bringing more material on record.

Mr. Arun Kathpalia, learned Senior Advocate for the Appellant submits

that the 'Committee of Creditors' has recommended liquidation of the 'Corporate

Debtor' by unanimous vote and under Section 33 (2) of the 'Insolvency and

Bankruptcy Code, 2016' ('I&B Code' for short) there is no option for the

Adjudicating Authority but to pass an order of liquidation. Mr. Shyam Sundar

Rathi, Resolution Professional appearing in person does not dispute this

proposition and submits that the application under Section 33 of the 'I&B Code'

has been filed for liquidation of the 'Corporate Debtor' in terms of the unanimous resolution and the recommendation of the 'Committee of Creditors' and is

pending since September, 2019.

After hearing the learned counsel we find that the 'Corporate Debtor' is not

a going concern and there being no resolution plan, the 'Committee of Creditors'

has unanimously decided to send the 'Corporate Debtor' into the liquidation.

Once the application under Section 33 of the 'I&B Code' was moved before the

Adjudicating Authority, in the given circumstances, it was left with no option but

to order the liquidation of the 'Corporate Debtor'. Collecting of material in regard

to the assets of the 'Corporate Debtor' and valuation reports etc. is not germane

to the disposal of the application under Section 33 of the 'I&B Code'. Since the

impugned order suffers from legal infirmity, same cannot be supported, we

accordingly set aside the impugned order with direction to the Adjudicating

Authority to dispose of the application of the 'Resolution Professional' under

Section 33 of the 'I&B Code' within a week's time.

The appeal stands disposed of.

A copy of this order be sent to the Adjudicating Authority (National

Company Law Tribunal), Ahmedabad Bench forthwith.

[ Justice Bansi Lal Bhat ] Acting Chairperson)

[ Dr. Alok Srivastava ] Member (Technical)

[ Shreesha Merla ] Member (Technical) /ns/gc/ Company Appeal (AT) (Insolvency) No. 683 of 2020