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Judgment
This application has been filed by the Interim Resolution Professional (IRP) acting as Resolution Professional (RP), seeking orders for Liquidation of the Corporate Debtor (CD) M/S NEOCORTEX LIFE SCIENCES PRIVATE LIMITED.
Application:
The CD was admitted into Corporate Insolvency Resolution Process (CIRP) under Section 10 of IBC vide Order of this Tribunal dated 13.02.2024 in CP (IB) No. 186/10/HDB/2023, and the Applicant herein was appointed as Interim Resolution Professional (IRP). Subsequently, the IRP made public announcement on 16.02.2024 in Form A through daily newspapers, inviting claims from creditors of the CD.
It is submitted that, after receipt of claims, IRP verified the claims and submitted the List of Creditors1 and constituted the CoC2, which was taken on record by this Tribunal on 24.06.2024. Further, the CoC was reconstituted on 08.03.2025 as under, and was taken on record by this Authority3 on 26.03.2025.
| S No | Name of the Operational Creditor | Claim Amount admitted (Rs) | Voting Rights (%) |
|---|---|---|---|
| 01 | Fermentis Life Sciences Private Limited | 31,52,856.00 | 67.215 |
| 02 | Zero Gravity Communications LLP | 5,07,400.00 | 10.817 |
| 03 | Mr Irfan Ali Syed | 4,66,000.00 | 9.934 |
| 04 | Tings Works LLP | 3,36,160.00 | 7.166 |
| 05 | Ms Shivani Joshi | 1,33,332.00 | 2.842 |
| 06 | Patco Pharmaceuticals Pvt Ltd | 48,676.00 | 1.038 |
| 07 | Content Whale Pvt Ltd | 46,303.40 | 0.987 |
| Total : | 46,90,727.40 | 100% | |
It is stated that, the CoC during its 1st meeting held on 03.04.2024 approved an amount4 of Rs 2,96,682.56 towards IRP fees, CIRP expenses incurred upto 1st CoC meeting. The proposal for interim finance/sharing the expenses required to run the process was not approved by CoC, and no items were transacted in other CoC meetings.
It is submitted that, the value of assets5 of the CD are insignificant, and the Bank balance as on CIRP commencement date was Rs 70,650.56. The CD has discontinued the operations and has a weak asset base to help it revive.
It is further asserted that, the IRP has not only faced resistance from suspended management but has also faced the non-cooperation from the members of CoC. The members of CoC after its 1st meeting, neither attended the meeting nor have casted votes through e-voting. Even after reminder emails to join the meeting and also requesting them to attend the meeting over phone, the members have not attended the CoC meetings.
No feasibility for revival
That the CoC members in its 1st meeting felt that, the CD Company has no major assets to attract the Applicants to submit their Expression of Interest to extend a Resolution Plan, and the amount due to creditors were huge, it was futile to incur expenses for continuing the CIRP and suggested the process to be discontinued. Further, the IRP upon receipt of the stock statement noted that, the stock had expired and could not be sold.
That the CoC has not appointed the Resolution Professional (RP), and not chose to appoint the IRP as RP. The IRP is acting as RP to conduct the process as mandated under Regulation 17(3) of CIRP Regulations.
It is submitted that, the Applicant IRP has incurred an amount6 of Rs 5,77,355.32 to conduct the CIRP process. Further submitted that, as directed by the Adjudicating Authority vide order dated 13.02.2024, the CD paid a sum of Rs 2,00,000 lakhs towards advance fee of IRP and expenses towards CIRP, later no amount was paid to the Applicant IRP.
It is asserted that, the IRP is unable to take steps as to appoint valuers, preparation of information memorandum, approve the Expression of Interest etc., due to lack of funds. The suspended management is not coming forward to support inspite of directions by this Tribunal vide its order dated 13.02.2024.
It is submitted that, keeping in view of the above mentioned reasons, praying this Tribunal to; - Pass appropriate orders under Section 33 of IBC for Liquidation of the Corporate Debtor. - Appoint any other RP as Liquidator other than IRP acting as RP. - Take on record the expenses incurred during the CIRP amounting to Rs 3,77,355.32 (over and above Rs 2,00,000 received as directed by this Tribunal) and direct to reimburse the same to the IRP acting as RP.
Decision:
Considering the submissions made in the application by the IRP that the CD does not possess any substantial assets or ongoing business operations to attract Potential Resolution Applicants for submission of Expression of Interest or a Resolution Plan, this Adjudicating Authority is of the view that no fruitful purpose would be served by continuing the CIRP. Accordingly, in view of the recommendation made by the IRP and in exercise of powers conferred under Section 33(1) of IBC 2016, we hereby order the Liquidation of the Corporate Debtor.
ORDER
a. Liquidation of M/S NEOCORTEX LIFE SCIENCES PRIVATE LIMITED, shall be conducted in the manner as laid down in Chapter III of Part II of the IBC, 2016.
b. The Applicant IRP7 Mr Racharla Ramakrishna Gupta is appointed as Liquidator. His fees of Rs 3,00,000 (Rupees Three Lakhs) for the
---7 Having Registration No. IBBI/IPA-002/IP-N00012/2016-2017/10029, Address: M/s. R and A Associates, Company Secretaries Flat No. T202, Technopolis, 1-10-74/B Above Ratnadeep Super Market, Chikoti Gardens Begumpet, West Marredpally, Telangana - 500016, email : [email protected] first six months plus the expenses of Liquidation will be paid by the promoters/directors of the CD, to the extent it is not recovered from the liquidation of the CD’s assets.
c. The Liquidator shall issue public announcement stating that Corporate Debtor is in Liquidation.
d. The Moratorium declared under Section 14 of the IBC, 2016 shall cease to operate here from.
e. Subject to section 52 of the IBC 2016 no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
f. All powers of the Board of Directors, Key Managerial Personnel and partners of the Corporate Debtor shall cease to have effect and shall be vested in the Liquidator.
g. The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code, read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016.
h. Personnel connected with the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs.
The Liquidator shall be entitled to such fees as may be specified by the Board in terms of Section 34 (8) of the Code.
j. This Order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the Liquidation process by the Liquidator.
k. Copy of the Order shall be furnished to the IBBI, to the Regional Director (South Eastern Region), Ministry of Corporate Affairs; Registrar of Companies & Official Liquidator, Telangana, the Registered Office of the Corporate Debtor; and the Liquidator.
With the above directions, this Application is allowed and stands disposed of.