The decision of the Committee of Creditors (CoC) to initiate liquidation under Section 33(1)(a) of the IBC, supported by 100% voting and a failure of the corporate debtor to honor settlement commitments, is binding and warrants no interference by the Appellate Tribunal.

JUDGMENT

(Hybrid Mode)

[Per: Justice Sharad Kumar Sharma, Member (Judicial)]

The Appellant, being the erstwhile Chief Promoter and MD of the Corporate Debtor, M/s. ISR Infra Private Limited is before this Appellate Tribunal expressing his grievances as against the impugned order dated 10.05.2021, passed by the Ld. NCLT Amravati bench in IA No. 176/2019, which was subject matter of consideration in TCP (IB) No. 106/9/AMR/2019, to be read with CP (IB) No. 382/9/HDB/2019. By virtue of the impugned order dated 10.05.2021, the application preferred by the Respondent / Resolution Professional, by invoking the provisions contained under Section 33 (1) (a) of the I & B Code, 2016, seeking an order of liquidation of the Corporate Debtor, has been allowed.

2. Briefly stated, the Appellant contends and claims to be the chief promoter of the Corporate Debtor, i.e., M/s. ISR Infra Private Limited. His grievance is that the process of liquidation has been resorted to without venturing into or exploring the possibility of a resolution, which should have been done in the first instance before putting the Corporate Debtor to liquidation.

3. It was further argued by the Ld. Counsel for the Appellant that, the Appellant has always been making efforts to settle the dues with the major Financial Creditors, i.e., the Indian Overseas Bank, till the date of filing of an application for liquidation. It is projected by the Appellant that he has been pursuing the OTS proposal, but the same was declined to be accepted by the Financial Creditor, resulting into the invocation of the provisions under Section 33(1) of the I & B Code.

4. He has contended that he has extended various proposals, for settlement of the dues to the Sole Financial Creditor (FC) and has, from time to time, improved the offer and that the revised offers as solicited by the bank itself indicate that the bank was interested in settling the issue rather than forcing the Corporate Debtor to face the liquidation process.

5. He has further submitted that, owing to an abrupt closure of the CIRP process, the process of settlement got stalled and the progress of the Corporate Debtor and its continuance as on ongoing concern has been completely jeopardized. The Appellant's case was that, he, being an Engineering Graduate, had ventured into the field of Real Estate Business and construction by establishing a partnership firm in 2007, which was later converted into a private limited company and had taken up various infrastructure projects in which they were initially successful, but later on account of business failures, mounting overdues and changes in business climate the financial viability of the CD was affected and the account with IoB slipped into NPA.

6. He has contended that the Sole Financial Creditor, i.e., Indian Overseas Bank, declared the account of the CD as to be an NPA, without making any efforts to explore possibilities of restructuring of the loan. At the same time Section 9 proceedings were initiated by one Operational Creditor M/s. CMR Transport Contractors and CD was admitted into CIRP. The Appellant immediately settled their dues with the said Operational Creditor by paying their dues, and in response thereto, the Operational Creditors have submitted Form FA to the Resolution Professional. However, the Financial Creditor, i.e., the Indian Overseas Bank instead of coming forward for a settlement, insisted upon the payment of the entire dues as a complete down payment before venturing into the withdrawal of the proceedings by invocation of