National Company Law Tribunal, Hyderabad Bench: The Coram of Madan B Gosavi (Judicial Member) and Veera Brahma Rao Arekapudi (Technical Member) was of the view that the pertinent case was a fit case to pass liquidation order in consonance with the commercial wisdom in terms of Section 33(1) of the Insolvency and Bankruptcy Code, 2016 (Code).
In the instant matter, Resolution Professional had sought for liquidation of Corporate Debtor, Ind-Barath Power Gencom Ltd. under Section 33 (2) and 34 (1) of the Code. The Corporate Debtor was supplying electricity to Tamil Nadu Generation and Distribution Corporation Ltd. (TANGEDCO) and it owed an amount of Rs. 157,85,71,585 to the Corporate Debtor. And even the deposit of Rs 36 crores in fixed deposit under garnishee orders by TANGEDCO, could not improve the financial position of the Corporate Debtor. Further, it was stated that the Committee of Creditors (CoC) in its commercial wisdom had rejected the resolution plans.
While stating the reason the Tribunal referred to K Sashidhar v. Indian Overseas Bank, (2019) 148 LA 497 (SC) which further held,
“The Adjudicating Authority (NCLT) is not expected to do anything more; but is obliged to initiate liquidation process under Section 33(1) of the I&B Code. The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors”.
Therefore, falling in line with the CoC wisdom to not accept any of the resolution plans for revival of the Company and having been resolved with 81% voting share in favor of the liquidation of the Company, the Adjudicating Authority found no reason to go against and hold a contrary view in terms of Section 33(1) (a) of the Code.[Axis Bank Ltd. v. Ind-Barath Power Gencom Ltd., 2021 SCC OnLine NCLT 371, decided on 13-08-2021]
Agatha Shukla, Editorial Assistant has reported this brief.
Counsel for the Parties:
For Applicant: Shri V.V.S.N, Raju, Advocate