Punjab National Bank Vs Aabha Industries Limited (NCLT Chandigarh)
Failure of Resolution Plan Approval Leads to Liquidation Order by NCLT Chandigarh; Arbitral Award Cannot Override IBC Moratorium During CIRP; NCLT Directs Handover of Factory Premises Because Arbitral Award Execution Was Hit by Moratorium; Resolution Professional Entitled to Take Custody of Corporate Debtor Assets Despite Earlier Arbitral Award.
The NCLT Chandigarh allowed an application filed by the Resolution Professional of Aabha Industries Limited under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 and ordered liquidation of the Corporate Debtor after the Committee of Creditors (CoC) rejected the only resolution plan received during the Corporate Insolvency Resolution Process (CIRP). The CIRP had commenced on 23.12.2022 on a petition filed by Punjab National Bank under Section 7 of the Code.
During the CIRP, Form-G inviting Expressions of Interest was published and several prospective resolution applicants showed interest. Ultimately, only one resolution plan submitted by Greyline Knitwears was considered, but the CoC did not approve it in its 10th meeting held on 18.09.2023 and resolved to liquidate the Corporate Debtor. The Tribunal observed that the statutory requirements under Section 33 had been fulfilled and appointed Rajesh Mehru as liquidator. The moratorium under Section 14 was directed to cease from the date of liquidation order.
