Loveni Marketing & Advertising Pvt. Ltd. Vs SN Cinema Advertising Pvt. Ltd. (NCLT Delhi)
NCLT Delhi held that application for initiation of liquidation of the Corporate Debtor filed under section 33(2) read with section 33(1)(b) of the Insolvency and Bankruptcy Code is allowed in view of non-cooperation of the management.
Facts- This Application has been filed by the Applicant being the Resolution Professional, before this Adjudicating Authority under Section 33(2) read with Section 33(1)(b)(i), (ii), (iii) and Section 34 of the Insolvency and Bankruptcy Code, 2016 and Rule 11 of the NCLT Rules, 2016 seeking initiation of the Liquidation of the Corporate Debtor.
Conclusion- The Hon’ble Supreme Court in N. Raja Kumar v. V. Nagarajan, Civil Appeal No. 2901 of 2021, has emphasized that revival is desirable, but where revival is frustrated by the non-cooperation of the management, the CoC is entitled to opt for liquidation. Similarly, as per Section 33(2) of the Code, the RP is empowered to file for liquidation when continuation of CIRP is futile, which is the case here.
Held that the CIRP continuation is no longer feasible, the CoC has exercised its commercial wisdom after repeated opportunities to the SBD and the fact that more than two years have lapsed since the CIRP commencement. The Adjudicating Authority finds that the present application filed by the RP under Section 33(2) read with Section 33(1)(b) of the Code is maintainable, justified, and should be allowed.
