The National Company Law Appellate Tribunal (NCLAT) Chennai has dismissed entrepreneur Sivasankaran, founder of Siva Industries appeal against the National Company Law Tribunal (NCLT) order on liquidation of Siva Industries.
NCLAT in the order said, “this Tribunal comes to a resultant conclusion that the Adjudicating Authority had rightly come to the legitimate and reasonable conclusion that the Corporate Debtor was required to be ordered for liquidation, in terms Section 33(1)(a) of the Code, 2016 and the same requires no interference. Viewed in that perspective, the Company Appeal fails.
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The NCLT in September,2021 ordered liquidation of Siva Industries and rejected lenders proposal to withdraw the company from bankruptcy proceedings. It had also rejected the application filed by Resolution Professional of Siva Industries.
The promoters of Siva Industries had proposed to pay ₹328.21 crore to IDBI Bankled consortium of lenders as a one-time settlement plan to withdraw the company from proceedings under the IBC at NCLT.
The NCLAT in its order said that the I & B Code, 2016 is not permitting ‘Liquidation of a Corporate Debtor’ in a direct manner. Upon failure of the ‘Corporate Insolvency Resolution Process’, the Code allows liquidation. If the ‘Adjudicating Authority’ is not in receipt of Resolution Plan on or before the expiry of the Maximum Period allowed for completion of the Insolvency Resolution Plan, then, liquidation of the ‘corporate debtor’ is to ensue.
If at any time prior to the confirmation of a Resolution Plan, the ‘committee of creditor’ resolve by a 66 per cent majority of voting shares where the ‘corporate debtor’ is to be liquidated, then, the liquidation may follow suit.
