In the matter of L G Fibre Private Limited
- CitationI.A. No. 16 of 2024 in CP(IB) No. 236(AHM)2023
Ratio decidendi
The rule this decision rests on
The Tribunal, on an application by the Resolution Professional under Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016, held that where the Committee of Creditors has resolved by the requisite majority under Section 33(2) to liquidate the corporate debtor, and no resolution plan has been received within the period available under the corporate insolvency resolution process, the Adjudicating Authority is bound to initiate liquidation under Section 33(1) read with Section 33(2), and no further extension of the process may be granted in that situation. Upon the initiation of liquidation, the moratorium under Section 14 ceases to have effect from the date of the liquidation order, and all powers of the board of directors and key managerial persons vest in the liquidator, who is to act under Section 33(5) to recover the assets and receivables of the corporate debtor.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
PJIADISJIAP lA No. L6 of 2024 in CP(lB) No. 236 of 2023 RE THE ADJUDICATING AUTHORITY ATIONAL COMPANY LAW TRIBUNAL AHMEDABAD BENCH COURT.I I.A. No. 16 of 20124 IN CP(IB) No. 236(AHMI 2o2s lAn Applicarion filcd u,dcr Scction ll3 & 34 r>f thc Insolvcncy & l]ankruptcy Codc, 2016]1
In Ile Matter CA Rahul N hbhai Shah Rcsolution Profi ssional o[ l, G Fibrc Privat Limitcd having addrcss t: 20, Sudcrshan icty, Part-2, Naranp, Nr. Naranpura us stop, Ahmcdabad-38 r3 ....Applicant And In The Matter Ilaj Itadhc Fin cc Limitcd 47, Shyamal Ro Housc, Nr. Shyamal Cr Roads, Satcllitc, Ahmcd bad-380015 ...Financial Crcditor Vcrsus L G Fibrc Priva I-imitcd (i I9, Bascmcnt Sarthi Avcnuc, B/h Satcllitc Pol cc Station, Satcllitc, Ahmcd bad 3B0OI 5 ... Corporatc Debtor
9-$et Irq4ennqe!_en: 1 2 /O8 / 2O2S l lPage lA No. L6 of 2024 in CP(lB) No. 236 of 2023 Coram: MRS. HANKARE HON'BLE M (JUDICIAL} MR. VELAMU G VENKATA CHALAPATHY HON'BLE (TECHNTCAL) Present:
F-or thc Appli Ms. IIirva I)avc, Advocatc Rcsolution cssion a I : Mr. Ila hul Sh ah CA prcscnt in pcrson, ORDER 1. J'hc rcscnt Intcrlocutrtry ApplicaLion is filed by the Ilcso tion Profcssional ("RP") undcr Scction 33 &34of thc I rsolvcncy & Bankruptcy Codc,2O l6 ("IBC, 2016") sccki g ordcr of liquidation oF Corporatc Dcbtor namely M/s. . G. Fibrc Pst. I-td. 2. Thc )orporatc Dcbtor was admittcd into corporatc 'cncy Insol Rcsolution Proccss ("CIRI,"1 vide ordcr datcd 21 .1 .2023 passcd bry this Adjudicating Authority on an appl i ,al.ion lilcd by Financial crcditor Raj Radhc Financc Limit d undcr Scction 7 of thc IBC,2Ol6 and Mr. Rahut N.S ah having Rcgistration No. (IBBI/tpA-OO l /Ip-p- 0217 l2o2o-2o21 / I 3367) was appoin tcd Intcrim Rcsol tion Profcssional (-lRP'). 'lhc IRP madc public 2lPage lA No. L6 of 2024 in Cp(tB) No. 236 of 2023 ann nccmcnt and invitcd claims lrom thc creditors or thc rporatc l)cbtor in Form A datcd 23.12.2023. 3. In th l't mccting of coc it was rcsolvcd to continue IRp asR. In thc said mccting valucrs wcrc also appointcd in com iancc with llcgulation 27 ol thc Insolvcncy and Ilan uptcy Iloard of Tndia (Tnsolvcnr:y Rcsolution proccss lor C poratc Pcrsons) Rcgulations, 2016. Thc coc also app publication of F'orm -G on I8.01.2024 in trngli h and Rcgional languagc ncwspapcr widc circu tion at thc location of thc rcgistcrcd otficc of thc Corp tc l)cbtor. 4. In th 2"d mccting o[ CoC datcd 14.O2.2O24, Rp suggcsted to rc issuc of F'orm-G sincc no rcsolution plan was rccci, CoC suggcstcd to wait lor rc-issuancc of F.orm G until oks of Accou nts till clRp commcnccmcnt datc wcrc civcd from thc suspcndcd managemcnt. 5. Int 3.d mccting of CoC datcd 02.O3.2024 linal va [ua linal va lua on rcports, CoC rccommcndcd liquidation of ' thc Cr>rpo l)r:b1.or.
3lPage tA No. 1.6 of 2024 in Cp(tB) No. 236 of 2023 6. In 4th mccting of CoC datcd 12.O6.2O24,thc Rp pro lfor appoin.mcnt of transaction auditor ror dctc ining thc transactions undcr Scction 43, 45, 49 and of IBC, 2016. Ilowcvcr, thc rclatcd party of thc S ndcd managcmcnt has undcrtakcn to pay thc outs ding rcccivablc to thc tunc of Rs. 4T ,OO,OOO I _ with 7 days lailing which Rp was cntitlcd to file an appl tion for avoidancc of transaction. Later on reratcd par ol thc suspcndcd managcmcnt has givcn an und ing dcposit thc amount within lour wceks. 7. In 4Lh mccting of CoC datcd 12.06.2024, the CoC app thc asscssmcnt of salc as going conccrn as pcr tion 39c of RcEr-, CTRP Rcgulations, 2016 and also app cd thc contribution in casc liquidation cost is in su cnt to mcct thc cost of cntirc proccss as pcr Rcgu tion 39 B ol CIRP Rcgulations, 2016 by tOO% voti Tt is also rcsolvcd that Rcsolution profcssional Mr. Ilitcs Agrawal having Ip Rcgistration No. IBBI/ IpA- 001 /r -P-0 ) 183 I 20 19-2020 I 12639 bc appointcd as Liqui r and will bc paid his fccs Rs. 5O,OOO/-
4lPage lA No. L6 of 2024 in CP(IB) No. 236 of 2023 8. Wc vc hcard thc l.carncd Counscl f<rr thc Applicant and peru d thc nratcrial availablc on rccr>rd. Tt is notcd that CoC has dccidcd to liquidatc thc Corporatc Dcbtor by r0 voting. It appcars from thc F'orm H submittcd by thc P through scparatc aflidavit datcd 01 .O7.2024 thaL thc calisablc valuc is mcntioncd to bc Rs 7.OO lakhs whil thc liquidation valuc is mcntioncd to bc Rs.l I .00 la kh only. IIowcvcr, thc RP has not anncxcd thc valu tion rcport, nor has hc apparcntly takcn any action [or covcry of thc asscts mcn tioncd as lcnding and rccci ablcs in thc balancc shcct. CoC has passcd thc rcsoI tion to liquidatc thc Corporatc Dcbtor with rcquisitc votin as givcn undcr Scction 33(2) o[ the IBC, 2016 and thc riod availablc undcr CIRP was ovcr as on 20. .2024 and no furthcr cxtcnsion can bc grantcd as no solution plan was rcccivcd. Accordingly, wc pass iollo ing ordcr: ORDER l. Initiatc liquidation of Corporatc Dcbtr>r in tcrms of provisions of Scction 33(1) and 33 (2) of IBC, 2016
5lPage lA No. L6 of 2024 in CP(lB) No. 236 of 2023 r.w. Rcgulation madc thcrcundcr which shall bc cffcctivc from thc datc ol this ordcr. 2. Thc Moratorium dcclarcd undcr scction l4 of thc Codc shall ccasc to havc clfcct from thc datc of the ordcr of liquidation. Wc hcrcby t Niharika 3. appoin Mahcshwari, Rcsolution Prolcssional having rcgistration no. rBBr / rpA-00 1 / rp-p-O 27 2s I 2022-2023 I 141s7, addrcss : A-9O4, Rudra l,lnclavc, ,Althan Bhimrad Canal road ,ncar Shiv Rcsidcncy ,Bhimrad, Surat, Gujarat,395007 is hcrcby appointed as a 'Liquidator' ol thc C<>mpany L. G. Fibrc Privatc Limitcd. 4. Thc liquidator so appointcd shall complete thc liquidation proccss as pcr thc provisions ol thc Codc r.w. thc Insolvcncy and lSankruptcy Board of India (Liquidation Proccss) Rcgurlations, 2016. 5. Thc pcrsonncl of thc corporatc dcbtor arc dircctcd to cxtcnd all coopcration to thc liquidator as rcqu ircd by him in managing thc liquidation proccss of thc corporaic dcbtor.
6lPage lA No. 1,6 of 2024 in CP(lB) No. 236 of 2023 6. AII thc powcrs of thc lroarcl of Dircctors, kcy managcrial pcrsons, thc partncrs of thc Corporatc Dcbtor hcrcaftcr ccasc to cxist. All thcsc powcrs hcnccforth, vcst with thc Liquidator. Hc is furthcr dircctcd to makc s to rccovcr thc <:ffrrrl asscts through appropriatc mcasurcs and complcte the liquidation proccss.
7. Thc Liquidator will chargc lccs lor conduct of thc liquidation procccdings in proportion to thc valuc ol thc liquidation cstatc asscts as spccificd by IRBI and thc samc shall bc paid to thc Liquidator from thc pr:occcds of thc liquidation cstatc undcr Scction 53 ol thc Codc. 8. That oncc having liquidation proccss initiatcd, subjcct to scctir>n 52 ol thc codc, no suit or other lcgal procccdings shall bc institutcd by or against thc corporatc Dcbtor savc and cxccpt thc libcrty to thc liquidator to institutc suitc or other legal procccding on bchalfl of thc corporatc debtor with prior approval of this Adjudicating Authority as 7lPage lA No. L6 of 2024 in CP(lB) No. 236 of Zo23 mcntioncd in Sub-scction 6 of Scction 33 of the I.B. Codc.
9. Thc Liquidator shall takc ncccssary lcgal action to rccovcr thc tradc rcccivablcs and othcr crcdits such as loans and advanccs from thc par-tics which arc rcflcctcd in thc latcst balancc sheet of thc Corporatc l)cbtor:, if any. This direction is hcrcby givcn in concurrcncc of thc jurisdiction prcscribcd undcr Scction 33(5) of thc Codc. 10. This liquidation ordcr shall bc a dccmcd to bc noticc of dischargc t<> thc officcrs, cmployees and workmcn of thc Corporatc Dcbtor except to the cxtcnt of thc busincss of thc Corporate Debtor continucd during thc liquidation proccss by the Liquidator. 11. Thc liquidator is dircctcd to issue a public announccmcnt stating that thc corporatc dcbtor is in liquidation. Thc liquidat<>r will also scrve a copy of this ordcr to thc various Govcrnment I)cpartmcnts such as InComc 'lax, GST, VAT, tc., e
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.,Iili,i"1: :::?11,\ who arc likcly to havc any claim upon thc corporatc dcbtor: so that thc authorities concerncd arc informcd of thc liquidation ordcr timcly. Thc liquidator witl also providc a copy o[ this ordcr to thc tradc unions/cmploycc associations of thc corporatc dcbtor so that thc workman/employccs could also bc informcd of this liquidation ordcr through thcir association. (x) Thc Rcgistry is dircctccl to communicatc this order to thc conccrncd Rcgistrar of thc Companics, thc rcgistcrcd officc r>f thc corpr>ratc dcbtor, thc rcsolution profcssional, and the liquidator by spccd post as wcll as c-mail within onc wcck from thc clatc ol this ordcr, aftcr complction of all thc formalitics. 12 Thc Rcgistry is dircctcd to upload this order on thc Oflicial Wcbsitc within maximum two working days from thc datc of this ordcr. Thc authcnticatcd copy of this ordcr bc also scnt by thc rcgistry to thc F-inancial Crcditor, Corporatc Dcbtor, Rcgistrar ol thc Company, tlcsolution Profcssional cum 9lPage tA No. 1,6 of 2024 in CP(lB) No.236 of 2023 Liquidator by Spccd-post within one weck from this ordcr. Accordingly, TA No. 16 of 2024 in CP(IB) 236 of 2023 is allowcd and stands disposcd of.
=Dl- sD/- DR. V.c. VENi{ATA pHAiT,APATHY CHITRA HANI(ARE MEMBER(TpCHNTCAL) MEMBER(JUDICIAL)
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