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Judgment
ORDER
Hearing Conducted Through VC
Per: SANJIV JAIN, MEMBER (JUDICIAL)
The present Application has been filed under Section 54(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'Code') by the Liquidator seeking an order of dissolution M/s. Sri Chandra Moulishvar Spinning Mills Private Limited having CIN: U17111TZ2004PTC011356 and
Kulathupalayam, Veerapandi Post, Tirupur, Tamil Nadu, India – 641 605 (hereinafter referred to as ‘Corporate Debtor’).
It is stated that CIRP in respect of the Corporate Debtor was initiated on 07.06.2018 in CP/558/(IB)/CB/2018. Liquidation of the Corporate Debtor was ordered by this Tribunal vide order dated 04.02.2019 in MA/92/2019.
It is stated that pursuant to the Liquidation order, the Applicant made a public announcement on 13.02.2019 in the dailies ‘The New Indian Express’ (English) and ‘Dinamani’ (Tamil). The last date for submission of the claim before the Applicant was fixed on 06.03.2019.
It is stated that the Applicant had received 24 (twenty four only) claims. The details of the claims received and admitted are as follows:
M/S CHANDRA MOULISHVAR SPINNING MILLS PRIVATE LIMITED., (UNDER LIQUIDATION)
List of Stakeholders in pursuant to regulation 31(1) of IBBI (Liquidation Process) Regulations 2016
| Sl.No | Amount of Claim Admitted RS. | Secured/ UnSecured | Details of Stake Holders - Name | Address of the stake holders | Admitted/Rejected/Partly Rejected Proof | Proof's Enclosed |
|---|---|---|---|---|---|---|
| 1 | 335275000 | Secured | Canara Bank | Canara Bank PAN: AAACC6106G TAN: CMBC056007 No. 166, T V Samy Road West, R S Puram, Coimbatore-641 002 | Admitted | Yes |
| 2 | 674000 | Unsecured | Mahabir Prasad Surana | No.21/14, Shiruthi Apartment, Sayapatra Street, Rayapuram, Tirupur - 641 601 | Admitted | Yes |
| 3 | 816000 | Unsecured | Rajkumar Surana | 5/2, Rajhallav Shah Lane, Howrah, Kolkata - 700 001, West Bengal | Admitted | Yes |
| 4 | 1323410 | Unsecured | Sweta Dharewa | 2/22, Shalom Apartment, Ranganathapuram, 2nd Street, Rayapuram, Tirupur - 641 601 | Admitted | Yes |
| 5 | 674000 | Unsecured | Anju Surana | 21/14, Shiruthi Apartment, Sayapatra Street, Rayapuram, Tirupur - 641 601 | Admitted | Yes |
| 13 | 1667709 | Unsecured | Alita Bhandari | Balaji Enclave Flat No.103, 40(2), Soosaipuram, 1st Street, Saipatra Street, Rayapuram, Tirupur - 641 601. | Admitted | Yes |
| 14 | 552000 | Unsecured | A. Devendran | 27, Marshrammal Nagar, Chandrapuram, KNP Colony (PO), Tirupur - 641 608. | Admitted | Yes |
| 15 | 4368000 | Unsecured | C. Ranjith | Kadhirampatti Akaram, Tirupathur, Vellore - 635 653. | Admitted | Yes |
| 16 | 4475000 | Unsecured | G. Kaviya | 17/B Town Estn, 3rd Street, Tiruppur, T.C. Market, Tiruppur- 641604 | Admitted | Yes |
| 17 | 34448858 | Unsecured | Sri Kosar Traders | No.1,K.G.Layout, Kongu Main Road, Tirupur- 641607 | Admitted | Yes |
| 18 | 3693000 | Unsecured | B. Saraswathi | 14, kalyanji mill road, Pollachi - 642 001 | Admitted | Yes |
| 19 | 4340000 | Unsecured | P.Ramesh | No. 46/85, Dharmalingam street, near Nehru Kalyana mandapam, Pollachi, colmbatore - 641 605. | Admitted | Yes |
| 13 | 1667709 | Unsecured | Alita Bhandari | Balaji Enclave Flat No.103, 40(2), Soosaipuram, 1st Street, Saipatra Street, Rayapuram, Tirupur - 641 601. | Admitted | Yes |
| 14 | 552000 | Unsecured | A. Devendran | 27, Marshrammal Nagar, Chandrapuram, KNP Colony (PO), Tirupur - 641 608. | Admitted | Yes |
| 15 | 4368000 | Unsecured | C. Ranjith | Kadhirampatti Akaram, Tirupathur, Vellore - 635 653. | Admitted | Yes |
| 16 | 4475000 | Unsecured | G. Kaviya | 17/B Town Estn, 3rd Street, Tiruppur, T.C. Market, Tiruppur- 641604 | Admitted | Yes |
| 17 | 34448858 | Unsecured | Sri Kosar Traders | No.1,K.G.Layout, Kongu Main Road, Tirupur- 641607 | Admitted | Yes |
| 18 | 3693000 | Unsecured | B. Saraswathi | 14, kalyanji mill road, Pollachi - 642 001 | Admitted | Yes |
| 19 | 4340000 | Unsecured | P.Ramesh | No. 46/85, Dharmalingam street, near Nehru Kalyana mandapam, Pollachi, colmbatore - 641 605. | Admitted | Yes |
| 20 | 1531640 | Unsecured | Dinesh Saraogi | 197C, Tamilnadu spinning mill compound, Analpudur, Avinashi- 641 652. | Admitted | Yes |
| 21 | 1670880 | Unsecured | Meenakshi saraogi | 197C, Tamilnadu spinning mill compound, Analpudur, Avinashi- 641 652. | Admitted | Yes |
| 22 | 2290000 | Unsecured | B Indrani | 3/1 R.V.E Layout, Velan Nagar, Thennampalayam, T.C Market, Tiruppur- 641604 | Admitted | Yes |
| 23 | 4687650 | Unsecured | Shri Narayanan Traders | 261, Dharmapuram Street, Rajapalayam 626117 | Admitted | Yes |
| 24 | 208897 | Unsecured | Mahalingam Suresh Kumar | 27/9, Nivedh Vikas, Pankaja Mill Road, Puliyankulam, Coimbatore 641045 | Admitted | Yes |
It is stated that the Canara Bank, the sole secured creditor who has not relinquished the security interest of the Corporate Debtor have taken the entire realisation from the assets of the Corporate Debtor. Since there is no asset or cash balance left with the Corporate Debtor, the Liquidator has not opened separate Bank Account for liquidation process.
It is stated that as per Regulation 13 of the Liquidation Regulation, the Preliminary Report was filed within 75 days from the Liquidation Commencement date on 20.04.2019. The date of appointment of the Registered Valuers for the purpose of valuating the assets of the Corporate Debtor was 17.10.2018. But subsequently, no valuation was carried out due to non-availability of the Corporate Debtor's Assets under the Liquidation Estate.
It is stated that the Secured Financial creditor Canara Bank, Asset Recovery Management Branch - Coimbatore has not relinquished the security interest over the Secured assets of the Corporate Debtor under liquidation process. Further it has obtained direction U/s. 52 of IBC, 2016 for realization of
the security by initiating proceedings under SARFAESI Act, 2002 from this Tribunal in MA/198/IB/2019 in CP/588/IB/2018.
It is submitted that the secured financial creditor Canara bank, Asset Recovery Management Branch, Coimbatore has informed the Liquidator that they have disposed all the securities owned under the name of M/s. Sri Chandramoulishvar Spining Mills Private Limited (Under Liquidation Process). The Secured Financial creditor has disposed the assets for following value tabulated below.
| S.No | Asset Particular | Disposed Value in Rs. |
|---|---|---|
| 1 | Company's Factory Land and Building | 771 Lakhs |
| 2 | Company's Plant and Machinery | 435 Lakhs |
| 3 | Cotton Stocks | 13.38 Lakhs |
| Total Value Realised | 1219.38 Lakhs |
It is stated that the Corporate Debtor does not have any other asset or receivable to be realized and there are no pending applications before this Tribunal regarding PUFE transactions.
It is stated that the Liquidation Process has been completed within the timelines as prescribed in regulation 47A of IBBI (Liquidation Process) Regulations, 2016. Details of the same are as under,
The Liquidation Process has been conducted as per the timeline indicated in regulation 47 as under:
| Section of the Code / Regulation No. | Description of Task | Timeline as per regulation 47 | Actual Timeline |
|---|---|---|---|
| Section 33 | Commencement of LCD and Appointment of Liquidator | T | T ON THE DATE ITSELF (DATE - 04.02.2019) |
It is stated, that this Tribunal, vide order dated 12.09.2022 excluded the
COVID-19 lockdown period and extended the Liquidation Period till 24.08.2022.
It is stated that the Sole Secured Financial Creditor has paid IPR cost of around Rs.6,00,000 (Six Lakhs only). The Liquidator had filed an application seeking remaining pending payment of CIRP expenditure of Rs. 2,08,897.00, Liquidation expenditure of Rs. 4,01,061.00 and Liquidator fees of Rs. 7,08,000.00 before this Tribunal on 27.07.2022, bearing Case Diary No. 3305118015262022.
It is stated that on 12.09.2023, this Tribunal dismissed the above said application and gave the applicant liberty to recover the above claims from the other financial creditors as per the law.
Heard the submissions made by the Learned Counsel for the Applicant and perused the documents on record. Section 54 of the IBC, 2016 provides as follows: -
"Section 54
Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor.
The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.
A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered."
From the submission of the Applicant and the documents on record, it is seen that the total assets of the Corporate Debtor have been completely
disposed of by the sole Secured Financial creditor, the Canara Bank in process of realization of their debts under SARFAESI Act, 2002.
It could be seen from the Final report filed by the Liquidator dated 31.10.2022, that after Distribution, there is no asset with the Corporate Debtor and No cash Balance in the Liquidation Account.
In the final report and the Compliance Certificate filed in Form-H by the Applicant, the amount distributed is recorded as follows,
| Sl. No | Stakeholders under Section 53 (1) | Amount Claimed | Amount Admitted | Amount Distributed | Amount Distributed to the Amount Claimed | Remarks |
|---|---|---|---|---|---|---|
| 1 | a: CIRP Costs | 2,08,897 | 2,08,897 | |||
| 2 | a: Liquidation Costs | 4,01,061 | 4,01,061 | |||
| 3 | (b)(i) Liquidators Fees | 7,08,000 | 7,08,000 | |||
| 4 | (b)(ii) | |||||
| 5 | (c) | |||||
| 6 | (d) | |||||
| 7 | (e) | |||||
| 8 | (f) | |||||
| 9 | (g) | |||||
| 10 | (h) | |||||
| TOTAL | 13,17,958/- | 13,17,958/- | ||||
In, the order dated 12.09.2023 in IA/1345(CHE)/2022 in MA/92/2019, this Tribunal also rejected the plea of the applicant claiming CIRP expenditure, liquidation cost and the fee of the Liquidator. Extract of the same is reproduced below:
"In the instant application, the Applicant has claimed balance CIRP expenditure of Rs.2,08,897.00/-, Liquidator fees of Rs.7,08,000.00/- and liquidation expenses of Rs.4,01,061.00/-.
It is seen from the the proceedings that the Respondent has already paid Rs.6.00 Lakh towards the CIRP and liquidation costs. It is not the case of the Applicant that the Respondent is the sole Financial Creditor of the Corporate Debtor. There are other Creditors. There is nothing to indicate what efforts the Applicant made to recover the CIRP and liquidation costs from the other financial creditors / stake holders. That being the position, the Respondent cannot be fully held
responsible to pay the CIRP and liquidation costs which as per law has to be shared by all the Financial Creditors in equal proportions.
Considering the above facts and circumstances, the Application filed by the Applicant qua directing the respondent / Canara Bank to pay the whole CIRP and Liquidation costs does not hold any merit. The Application is dismissed with liberty to the Applicant to recover the CIRP and liquidation costs from the other financial creditors as per law."
Since, the Corporate Debtor has been completely liquidated and no realizable asset is left with the Corporate Debtor, this Tribunal finds it reasonable to order for dissolution of the Corporate Debtor as per Section 54 of the Code.
Accordingly, we order the dissolution of the Corporate Debtor viz., M/s. SRI CHANDRA MOULISHVAR SPINNING MILLS PRIVATE LIMITED. The Liquidator is directed to forward a copy of this Order to the RoC concerned and also to the IBBI for its records and for updating the status of the Corporate Debtor on the 'MCA - Master data' within a period of 7 days from the date of this Order.
Accordingly, I.A (IBC) / 1346 (CHE) / 2022 in M.A / 92 / 2019 in C.P / 588 / (IB) / CB 2018 stands allowed and disposed of.
- Sd -
RAVICHANDRAN RAMASAMY MEMBER (TECHNICAL)
- Sd -
SANJIV JAIN MEMBER (JUDICIAL)
(Order Pronounced under Rule 151 of NCLT Rules 2016, by Hon'ble Technical Member Ravichandran Ramasamy on behalf of the Bench Comprising of Sanjiv Jain, Member (Judicial) and Ravichandran Ramasamy, Member (Technical))