SUNIL SURESHKUMAR KAKKAD Vs. UNION OF INDIA

JUDGEMENT

(1.) The present petition has been filed with the following reliefs:

(2.) The petitioner is a shareholder and suspended director of M/s. Sujyot Infrastructure Pvt. Ltd., a company which is undergoing Corporate Insolvency Resolution Process and is referred to as 'Corporate Debtor', hereinafter. On the Insolvency Application being CP (IB) No.559 of 2019, filed against the Corporate Debtor under Sec. 7 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code' or 'Code'), the Corporate Insolvency Resolution Process ('CIRP') has been initiated by the Adjudicating Authority (NCLT, Ahmedabad) against the Corporate Debtor vide order dtd. 22/12/2021 and an Interim Resolution Professional ('IRP') has been appointed. A Committee of Creditors (COC) was constituted on 22/12/2021 comprising of State Bank of India and Bank of Baroda. The first meeting of COC was convened on 1/2/2022. It is stated in the writ petition that COC in its very first meeting itself decided to liquidate the Corporate Debtor despite request made by the petitioner to explore the possibilities of its revival. The challenge is to the exercise of discretion by COC under Sec. 33(2) of the I&B Code to directly liquidate the Company without even issuing Expression of Interest to invite interested bidders for its revival.

(3.) The copy of the resolution of the first meeting 2ndphase dtd. 29/1/2022 of the COC is appended with the writ petition, a perusal of which indicates that the Resolution Professional initiated and recalled the discussion on the point of view of the majority of COC that there is no chance of revival or to restore the Company. It was noted that the Company (Corporate Debtor) is not a going concern for more than 5-7 years; there is no employee in the company; there is no key Managerial Person available in the Company; the Corporate Debtor is out of business for the aforesaid period. Assets viz. liability and claims are not favourable for restart and revival of Corporate Debtor It is, thus, better to send the Company (Corporate Debtor) into liquidation rather than to spend unnecessary CIRP cost and prolong the matter. The financial creditors viz. Bank of Baroda and State Bank of India were of the aforesaid view and stated that two other companies of the same management are under liquidation and, in the said scenario, it is better to take company into liquidation. It further records that the suspended Director of the Company viz. the petitioner herein expressed his view to explore opportunity to revive the Company rather than to go for liquidation initially. However, both the financial creditors viz. State Bank of India and Bank of Baroda were of the view that since there was no resolution plan received in other two companies as well and as there is no operational activity for more than 5-7 years, the best possible way is to put the company into liquidation.