Bank of Baroda Vs JM Feed Mills Private Limited (NCLT Chandigarh)
Conclusion: Where CoC, in exercise of its commercial wisdom, rejected all resolution plans and approved liquidation with 100% voting share, NCLT must order liquidation of the Corporate Debtor under Section 33(2) of IBC.
Held: CIRP of JM Feed Mills Pvt. Ltd. was initiated on admission of Sec. 7 petition. Mr. Somnath Gupta was appointed as IRP, later confirmed as RP. The CoC comprised a sole financial creditor – Bank of Baroda (100% voting share) with admitted claim of ₹30.00 crore. Form-G was issued twice; six PRAs submitted EOIs, and four submitted Resolution Plans. In the 10th CoC meeting (26.09.2023), Resolution Plans were placed for voting. CoC rejected all plans, and with 100% voting share, approved liquidation of the Corporate Debtor. CoC also resolved to: explore Compromise/Arrangement (Reg. 39BA), attempt sale of Corporate Debtor as a going concern (Reg. 39C), approve fees to liquidator as per Reg. 4 of Liquidation Regulations (Reg. 39D). Since RP could not be appointed as liquidator (per IBBI circular dated 18.07.2023), CoC in its 12th meeting (04.11.2023) approved appointment of Mr. Ashok Kumar Gupta (IP, Reg. No. IBBI/IPA-003/IP-N00010/2016-17/10072) as liquidator with 100% voting share. Applicant further placed the agenda for extension of CIRP, beyond 180 days expiring on 08.07.2023, by 90 days. The sole member of CoC approved the agenda for extension of CIRP. The extension of CIRP was allowed by Tribunal. Applicant placed the resolutions for voting on the Resolution Plans received from PRAs. Applicant also placed the agenda to consider filing of Application seeking Liquidation of the Corporate Debtor under Section 33(2) of the Code in the event the CoC members decide to vote against the Resolution Plan. Applicant placed the Resolution in accordance with Regulation 39B, 39BA, 39C and 39D of the CIRP Regulations before CIRP for voting. Resolutions were placed on e-voting which started on 29.09.2023 at 11:00 AM and concluded on 28.10.2023 at 06:10 PM. CoC requested the Applicant to also place the resolutions for seeking extension of 30 days beyond the CIRP period for voting on the Resolution Plans. The IRP in terms of Regulation 35 of the CIRP Regulations appointed IBBI Registered Valuers for carrying out valuation of assets of the Corporate Debtor. It was held that in view of the satisfaction of the conditions provided under section 33 of the Code, the Corporate Debtor, i.e., JM Feed Mills Private Limited, was directed to be liquidated in the manner as laid down in Chapter III of the Code. The present Resolution Professional was directed to hand over the relevant documents and control of the Corporate Debtor to the newly appointed liquidator namely, forthwith.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
