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Judgment
This IA(IBC)/2404(CHE)/2023, has been filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 by the liquidator of the Corporate Debtor seeking for an order for Dissolution of the Corporate Debtor viz., MPL PARTS AND SERVICES PRIVATE LIMITED.
From the Application, it can be seen that CIRP of the Corporate Debtor was initiated by this Tribunal vide order No. IBA/779/2019 dated 13.11.2020. The Applicant herein was appointed as Interim Resolution Professional (IRP) and thereafter as Resolution Professional (RP).
In the Second Committee of Creditors meeting on 12.05.2021, it was resolved that the Corporate Debtor may be liquidated, as the Corporate Debtor had no assets and there was no scope of business revival and there were no employees. Thereafter, the Liquidation of the Corporate Debtor was ordered by this Tribunal on 26.11.2021 in IA/603/2021 and the Applicant herein was appointed as the Liquidator.
Pursuant to the order of Liquidation, the Applicant caused the Public Announcement on 01.12.2021 by inviting claims from all the stakeholders and fixed the last date for submission of claim as 26.12.2021.
The Applicant received the following claims from the stakeholders of the Corporate Debtor and admitted the same as under:
| S.NO | PARTICULARS | NATURE OF CREDITORS | CLAIMS RECEIVED RS | CLAIMS ADMITTED RS |
|---|---|---|---|---|
| 1 | Sundaram Home Finance Ltd | Financial | 3,45,47,233 | 3,45,47,233 |
| 2 | Commercial Tax Dept | Operational | 14,05,378 | 14,05,378 |
| 3 | EPFO | Operational | 3,06,463 | 3,06,463 |
| 4 | ESIC | Operational | 26,866 | 26,866 |
| 5 | State Bank of India | Financial against Corporate Guarantee | 39,87,62,830 | 39,87,62,830 |
The sole secured financial creditor, Sundaram Home Finance Ltd, intimated the applicant to stay outside the liquidation process and not to relinquish its security interest to the liquidation estate concerning Flat No. E5, 5th Floor, USHERA, No. 189, Old Mahabalipuram Road, Sholinganallur, Chennai 600119. The scheduled property is a flat under construction which is stalled. The flat has only four pillars and no further construction has taken place. It is stated that due to the peculiar nature of the property, the sole financial creditor could not realize the property. Hence, the Liquidator has filed IA/2275/CHE/2023 under Regulation 38 of IBBI Liquidation Process Regulations 2016, seeking directions of the Tribunal to distribute the scheduled property to the sole secured financial creditor. The tribunal vide its order dated 18th December 2023 allowed the application and permitted the liquidator to distribute the schedule property to the sole secured financial creditor.
It is stated that one Bank Account bearing Account No 0736102000011617 was opened on 12.04.2022 with IDBI Bank, Velachery Branch for liquidation and all the receipts and payments of the Corporate Debtor under liquidation have been routed through this account.
The details of the relevant compliances as mandated under Section 54 of the IBC, 2016 read with the IBBI (Liquidation Process) Regulations, 2016 are listed here under:-
| S. NO | COMPLIANCE | AVERMENTS | PAGE NO. IN THE APPLICATION |
|---|---|---|---|
| 1 | Regulation 12 | Public Announcement in Form B in Financial Express in English and Makkal Kural in Tamil on 01.12.2021 | 29 |
| 2 | Regulation 35(2) | Appointment of Registered Valuers where no valuation conducted during CIRP | N/A |
| 3 | Regulation 31(2) | List of Stakeholders within 45 days of the Liquidation Commencement Date | Page 37 and Para 18 in Page 52 |
| 4 | Regulation 31A | Constitution of Stakeholders Consultation Committee (SCC) ( On 19.02.2022) . | Para 16 in page 51 |
| 5 | Regulation 13 | Preliminary Report dated 19.02.2022 | Page 32 and para 20 in page 52 |
| 6 | Regulation 34 | Preparation of Asset Memorandum dated 16.07.2021 | Page 35 and para 20 in page 52 |
| 7 | Regulation 41 | Opening of Bank Account in the name of the company in Liquidation in IDBI Bank | Page 47-49 and para 15 in page 51 |
| 8 | Proof of Closure of the above Bank Account and other account in the name of the Company | Page 49 | |
| 9 | Regulation 15 | Quarterly Progress Reports and proof of filing the same before this Tribunal | Para 12 in page 4 |
| 10 | Regulation 36 | Asset Sale Reports after sale of Reports | Not applicable |
| 11 | Regulation 42(2) | Proof of Distribution within Ninety days from the receipt of realization | Not applicable |
| 12 | Regulation 45 (3) | Final report dated 09.10.23 | Page 41-46 |
| 13 | Regulation 5 (1) (e) | Compilation of Minutes of SCC | Not Applicable |
| 14 | Regulation 15 | Audited Accounts of receipts and Payments | Page 50 |
| 15 | Regulation 37 | Completion of Liquidation Process within one year from Liquidation Commencement Date or extension if any, date of the order & period | By NCLT order dated 03.03.23 extended liquidation period by 1 year upto 26.11.23 |
| 16 | Form-H dated 09.10.23 | Pages 51-56 |
It is seen from Form-H that the Applicant / Liquidator has not filed any Application under Sections 43, 45, 50 and Section 66 of IBC, 2016.
Further in Form H, the amount realized from Sale of Liquidation Assets is Nil. The amounts distributed to stakeholders as per Section 52 and 53 of the code has been reproduced hereunder:
(Amount in Rs)
| S. NO | STAKEHOLDERS UNDER SECTION 53(1) | AMOUNT CLAIMED | AMOUNT ADMITTED | AMOUNT DISTRIBUTED | REMARKS |
|---|---|---|---|---|---|
| 1 | CIRP Costs U/s 53(1)(a) | 9,35,388 | 9,35,288 | Nil | Borne by Sundaram Home Finance Ltd |
| 2 | Liquidation Costs U/s 53(1)(a) | 10,97,762 | 10,97,762 | NIL | Cash balance plus balance borne by Sundaram Home Finance Limited |
| 3 | Debts owed to Unsecured Creditors U/s 53(1)(d) | 39,87,62,830 | 39,87,62,830 | Nil | No distribution-SBI- for guarantee provided to MPL Cars Pvt Ltd |
| 4 | Government Dues U/s 53(1) ( e) (i) | 17,38,707 | 17,38,707 | Nil |
| 5 | Secured Creditor after enforcement of security interest U/s 53(1)(e) (ii) | 3,45,47,233 | 3,45,47,233 | Nil | Asset Distributed under Regulation 38 |
At this juncture, it is relevant to refer to Section 54 of the IBC, 2016 which reads as under: -
Section 54
"(1)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.
(2)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.
(3)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 averments made in the Application, along with the perusal of the final report and the Compliance Certificate filed in Form-H by the Applicant, it is seen that the Corporate Debtor has been completely liquidated. In the circumstances as averred and as prayed for by the Applicant, an order for dissolution is required to be passed by this Tribunal under Section 54 of the IBC, 2016. Accordingly, we order for the dissolution of the Corporate Debtor viz., MPL Parts and Services Private Limited. The Liquidator is directed to forward the copy of this Order to the RoC concerned and also to the IBBI for its records within a period of 7 days from the date of this Order.
In terms of the above, this IA/(IBC)/2404/CHE/2023 is disposed of and consequently the IA/(IBC)/603/CHE/2021 and Company Application bearing IBA/779/2019 also stand disposed of. File be consigned to records.