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Judgment
Per: Justice (Retd) S.RAMATHILAGAM, MEMBER (JUDICIAL)
This is a Company Application filed by the Liquidator in relation to the voluntary liquidation of M/s. SNP Billing Services India Private Limited under Section 59(7) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”), seeking dissolution of the Applicant Company.
The Applicant Company was incorporated on 12.08.2003 under the provisions of the Companies Act, 1956. The main object of the Company is to carry on the business of conducting computer training centres via multi model way, web streamers, e-learning centre, computer consultancy business, software consultancy, centre for medical billing and other transcriptions in India or abroad etc. The details of the main objects are set out in the Memorandum of Association which is filed along with the typed set.
It is averred in the application that the company was continuously facing losses and the management was not able to expand the business nor was in a position to source new potential customers. Further, the operations of the Company were suspended from 31.03.2020 which further resulted in nil operations due to COVID-19 Pandemic.
On requisition from the shareholders of the Company, the Board of Directors of the Company in their meeting held on 07.01.2021 considered for the voluntary liquidation of the Company.
It was submitted by the Learned Counsel that in compliance with Section 59(3) of the IBC, 2016 read with Regulation 3 of IBBI (Voluntary Liquidation Process) Regulations, 2017, the Board of Directors viz. Mr. Velamur Srinivasan and Mrs. Sathya Bhama Vasan, verified by an affidavit has declared that they are solvent and the said affidavit is placed at pages 43 to 44 of the typed set filed along with Application. In further compliance, the audited financial statement of previous two years viz. 2018 – 2019 and 2019 – 2020 was filed with the RoC and the proof of the same is placed at Annexure 5 of the typed set filed along with the Application. It was further submitted that as on the date of declaration of solvency i.e. on 07.01.2021, the Company had the following assets and liabilities;
Assets:
| S. No. | Particulars | Assets | Amount (₹) | |
|---|---|---|---|---|
| Book Value | Estimated to Realize | |||
| 1 | Balance at Bank | 44,91,917 | 44,91,917 | 44,91,917 |
| 2 | Cash in Hand | Nil | Nil | Nil |
| 3 | Marketable Securities | Nil | Nil | Nil |
| 4 | Bills Receivable | Nil | Nil | Nil |
| 5 | Trade Debtors | Nil | Nil | Nil |
| 6 | Loans and Advances | 4,89,530 | 4,89,530 | 4,89,530 |
| 7 | Unpaid calls | Nil | Nil | Nil |
| 8 | Stock-in-trade | Nil | Nil | Nil |
| 9 | Work in progress | Nil | Nil | Nil |
| 10 | Freehold Property | Nil | Nil | Nil |
| 11 | Leasehold Property | Nil | Nil | Nil |
| 12 | Plant & Machinery | Nil | Nil | Nil |
| 13 | Furniture, Fittings, utensils, etc | Nil | Nil | Nil |
| 14 | Patents, Trademarks, etc | Nil | Nil | Nil |
| 15 | Air Conditioner | Nil | Nil | Nil |
| 16 | Computer | Nil | Nil | Nil |
| 17 | Investments other than Marketable Securities | Nil | Nil | Nil |
| 18 | Other Property | Nil | Nil | Nil |
| 19 | Income Tax Refund Due | Nil | Nil | Nil |
| 20 | Deferred Tax Asset | |||
| TOTAL | 49,81,447 | 49,81,447 | 49,81,447 | |
Liabilities:
| S. No. | Particulars | Liabilities | Estimated to rank for payment (to the nearest Rupee) |
|---|---|---|---|
| 1 | Secured on specific assets | Nil | Nil |
| 2 | Secured by floating charge(s) | Nil | Nil |
| 3 | Estimated cost of liquidation and other expenses including interest accruing until payment of debts in full | Nil | Nil |
| 4 | Unsecured creditors (amounts estimated to rank for payment) | Nil | Nil |
| (a) | Trade Accounts | Nil | Nil |
| (b) | Bills payable | Nil | Nil |
| (c) | Accrued expenses | Nil | Nil |
| (d) | Other Liabilities | Nil | Nil |
| (e) | Contingent Liabilities | Nil | Nil |
| Total | Nil | Nil | |
| Total estimated value of assets | 49,81,447 | 49,81,447 | |
| Total Liabilities | Nil | Nil | |
| Estimated surplus after paying debts in full | 49,81,447 | 49,81,447 |
The Learned Counsel submitted that as required under Section 59(3)(c) of the IBC, 2016 read with Regulation 3(c) of IBBI (Voluntary Liquidation Process) Regulations, 2017, a Special Resolution dated 21.01.2021, was passed at the meeting of the Company to liquidate itself and to appoint the Liquidator, which is placed at pages 153 to 159 of the typed set filed along with the Application. Further, the same was notified to the RoC and IBBI within 7 days, as per Section 59(4) of IBC, 2016, which is placed at page 160 to 164 of the typed set filed along with the Application.
The Learned Counsel submitted that the Liquidator has issued a Public announcement dated 25.01.2021 as required under Regulation 14 of IBBI (Voluntary Liquidation Process) Regulations, 2017 within 5 days of his appointment, one in "The Business Standard (English) and the other in vernacular "The Hindu" (Tamil) and the same is placed at pages 165 to 170 of the typed set filed along with the Application. It is also submitted that as required under Section 178 of the Income Tax Act, the Liquidator has given notice to the Income Tax authorities within 30 days of his appointment as Liquidator and that the Company is under Voluntary Liquidation vide his letter dated 27.01.2021 and the same is annexed at Annexure 14 of the typed set filed along with the Application.
The Learned Counsel submitted that as per Regulation 9 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, the Liquidator has submitted his preliminary report before IBBI on 05.03.2021, within 45 days from the Liquidation commencement date of the Company and the copy of the report is placed at pages 195 to 201 of the typed set filed along with the Application.
The Learned Counsel submitted that the upon public announcement having been done as per Regulation 14(2)(b) IBBI (Voluntary Liquidation Process) Regulations, 2017, the Liquidator has received claim in Form G from under Regulation 20 of the IBBI(Liquidation Process) Regulations, 2016 from the Recovery Officer, Employee Fund Organisation, Regional Office dated 06.07.2021. The full settlement of the claim was paid by the liquidator on 17.07.2021 and the same is annexed at Annexure 15 and 16 of the typed set filed along with the Application. Apart from the above, the Liquidator has not received any other claim from any Creditors/stake holders till the date of this application.
The Learned Counsel submitted that the Company did not have any fixed assets as on the date of commencement of liquidation and hence, the question of realization of the assets of the Company in liquidation does not arise.
Further, as on the liquidation commencement date, the company in liquidation had rental advances to the tune of Rs.4,60,000/-. As the liquidator could not collect the advances form the landlord in spite of several reminders, the same has been written off after obtaining consent from all the contributories vide their meeting dated 11.08.202. Proof of sending notices to the lessor seeking refund has been annexed at Annexure 19.
The Learned Counsel submitted that as per Regulation 34 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, the Liquidator had intimated the banker on 29.01.2021 requesting them to convert the existing current account in to "SNP Billing Services India Private Limited (In Voluntary Liquidation) and to change the authorized Signatory of the Account maintained with them and the said Requisition letter is placed at Annexure 14 of the typed set of the Application.
The Learned Counsel submitted that post payment of TDS on deemed dividend to an amount of Rs.4,52,919/- on 31.08.2021, the accumulated profit of Rs. 21,86,120 as dividend and investment in share capital of Rs. 16,94,255 to the members, there was no balance amount available in the hands of the liquidator for the purpose of distribution and the affairs of the company has been completely wound up and the copy of TDS challan and statement of repatriation certified by the auditor has been annexed at Annexure 20. The Company in liquidation is liable to be dissolved. Subsequent to the completion of liquidation process of the Company in liquidation, the liquidator has closed the bank account as mentioned above and the copy of the final bank statement is enclosed and Marked as Annexure -21.
It is also submitted that post making various legal, statutory and non-statutory payments and after distribution of funds to the shareholders of the Company, the liquidator has made an Application for closure of the Liquidation Account in the ICICI Bank. Further, it was submitted that upon completion of the Liquidation Process, the Final Report in accordance with Regulation 38 of the IBBI (Voluntary Liquidation Process) Regulations, 2017 was prepared and the same was filed with the RoC and the IBBI, the copy of the Final Report and the proof of filing the same with the RoC and the IBBI is placed at pages 221 to 225 to the typed set filed along with the petition.
It was also submitted that after making various payments including Liquidation costs paid in full as per Provisions of Section 53(1) of the IBC, 2016 AND Regulations 35 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, the Liquidator has distributed the funds among the shareholders, the details of receipts and payments are as detailed below:
ANNEXURE - A
| SNP Billing Services India Private Limited CIN:07230STN2003E1C051374 Liquidator Statement Period: 06.01.2021 to 31.12.2021 | ||||
| Receipts Since 06 January 2021 | Estimated value (INR) | Value realized (INR) | Payments Since 06 January 2021 | Payments (INR) |
|---|---|---|---|---|
| IT Refund | 29,530 | 29,530 | Legal, Liquidation Fee and other incidental payments 1. Liquidator's Fee (TDS INR 25,000) 2. Liquidation Expenses 3. Auditor's Fee (TDS INR 6,000) 4. Company Sec Fee (TDS INR 7,500) 5. Accounting Fee (TDS INR 0) 6. AMC Charges (TDS INR 0) 7. Conveyance Charges (TDS INR 0) 8. TDS Demand 9. PF Demand 10. Bank Charges | 2,50,000 1,05,440 70,600 88,500 10,000 10,000 14,923 70,560 8,945 15,904 |
| Payment to Members 1. Padmini Sridharanik Natheput Sridharan (TDS INR 4,20,428) 2. Sumant Sridharan (TDS INR 10,277) 3. Padmini Sridharan (TDS INR 10,277) 4. Varadachari Sridharan (TDS INR 10,277) 5. Bhama Vasan (TDS INR 831) 6. Velamur Srinivasan (TDS INR 831) | 35,87,795 67,696 87,696 87,696 14,745 14,745 | |||
| 29,530 | 45,21,447 | |||
Thus, on examining the submissions made by the Learned Authorized Representative and after perusing the documents annexed to the Application it appears that the affairs of the Company have been completely wound up and the assets of the Applicant Company have been completely liquidated and as such the Applicant Company deserves to be dissolved. Accordingly, in exercise of the powers conferred under Section 59(8) of IBC, 2016, we hereby order the dissolution of M/s. SNP Billing Services India Private Limited and the Applicant Company shall stand dissolved from the date of this order. Accordingly, the Company Application stands allowed.
The Registry and the Liquidator are directed to serve a copy of this order upon the Registrar of Companies, Chennai, and also to IBBI, within 14 days from the date of this Order.