Abhyudaya Cooperative Bank Ltd vs Mithila Cars Pvt Ltd

IA/2589/2025: The above IA is listed for pronouncement of the order. The same is pronounced in open court, vide a separate order.

The present application has been filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) read with Regulation 45 of The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, by M/s. Stress Credit Resolution Private Limited (‘Applicant’/ ‘Liquidator’). The Applicant seeks to place on record the final report along with Form H in the liquidation process of the Corporate Debtor, and to obtain discharge from its duties as Liquidator, along with closure of the liquidation process of the Corporate Debtor.

This Tribunal vide order dated 30.04.2021 passed in C.P. No. 939/IBC/NCLT /MB/MAH/2020, initiated Corporate Insolvency Resolution Process (“CIRP”) of Mithila Cars Private Limited (“Corporate Debtor”) and Ms. Prajakta Menezes was appointed as the Interim Resolution Professional (“IRP”).

This Tribunal vide order dated 18.04.2022 passed in I.A. No. (IBC)/2622(MB)2021 initiated liquidation process of the Corporate Debtor. Thereafter, this Tribunal vide order dated 05.02.2024, appointed Stress Credit Resolution Private Limited (“Applicant”) as the Liquidator.

The Liquidator, in accordance with Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016, issued a public announcement in Form B on 22.06.2022, inviting claims from all creditors. The last date for submission of claims was 20.07.2022. The announcement was published in the Mumbai Lakshadeep and Active Times newspapers.

The erstwhile Liquidator in accordance with Regulation 31 of the IBBI (Liquidation Process) Regulations, 2016, filed the list of stakeholders with this Tribunal on 29.08.2024, which included 2 financial creditors and 2 operational creditors. Thereafter, the erstwhile Liquidator in accordance with Regulation 31A (1) constituted Stakeholders Consultation Committee (“SCC”), consisting of 2 financial creditors.

The Applicant has submitted that certain assets being plant & machinery and other movable assets were sold by the erstwhile liquidator during his tenure and the proceeds realized from such sale were distributed as per Section 53 of the Insolvency and Bankruptcy Code, 2016. The same was intimated to this Tribunal in the progress reports filed as per Regulation 15 of the IBBI (Liquidation Process) Regulations, 2016. Upon change of liquidator vide order dated 5^th February 2024, the present liquidator only received leasehold land & building (secured to Asrec (India) Limited) as the sole fixed asset remaining in the Corporate Debtor. Thus, the Applicant has only dealt with the liquidation value of the leasehold land and building as per the valuation conducted under Regulation 35 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 during the corporate insolvency resolution process of the Corporate Debtor.

In accordance with Regulation 35(4) of the IBBI (Liquidation Process) Regulations, 2016, the average liquidation value of the Corporate Debtor was determined as Rs. 8,83,78,508/- as on the liquidation commencement date.

Based on the details set out in Form H, it is observed that, pursuant to the order dated 05.02.2024 effecting the change of liquidator and upon handing over of the assets to the Applicant, the liquidation value of the remaining liquidation estate stands at Rs. 7,83,46,500/-. The liquidation value has been derived from the valuation conducted during CIRP and no fresh valuation was conducted during the liquidation process.

It is submitted that the erstwhile liquidator conducted 2 e-auctions dated 28th October 2022 and 04.02.2023 for the sale of cars and inventory, however, as no Earnest Money Deposit (EMD) was submitted by the bidders, the said auctions were rendered unsuccessful. After the 2^nd e-auction was rendered unsuccessful, the cars were sold via private sale by the erstwhile liquidator. The spare parts and scrap were also sold to the same buyer, and the sale proceeds were received in the Liquidation Account.

The Applicant made publication of third e-auction notice on 28.07.2024 for the remaining asset i.e., leasehold land and building, however, in the absence of bid documents, the third e-auction process was rendered unsuccessful.

The notice of the 4^th e-auction was published on 28^th August 2024. The Applicant received EOIs from two prospective buyers, who were further classified as 'Qualified Bidders' viz. M/ s Space Realtors Private Limited for Block A (Sale of CD as a going concern) and Mukesh Enterprises for Block B (Leasehold land & building). Subsequently, EMD was received from only one of Qualified Bidders being M/s Space Realtors Private Limited who, at the 4th e-auction held on 23^rd September 2024, submitted a total bid of Rs. 8,00,00,000/- for Block A as against the reserve price of Rs. 8,00,00,000/-. Accordingly, M/ s Space Realtors Private Limited was declared as the successful bidder and the Applicant issued a Letter of Intent (LOI) dated 25th September 2024.

The Applicant received 100% of the bid amount including interest on delayed payments from the successful bidder in the following manner:

All the remaining assets of the Corporate Debtor have been sold, and liquidation proceeds have been realized by the Applicant. There are no assets remaining to be sold and realized in accordance with the asset memorandum prepared and filed by the erstwhile liquidator.

Further, the Applicant has distributed the liquidation proceeds to the stakeholders in accordance with Section 53 of the Code and settled the list of stakeholders as follows:

It is submitted that as per the preliminary report filed by the erstwhile liquidator, the estimated cost of the liquidation of the Corporate Debtor (excluding taxes and out of pocket expenses) for a period of 12 months was Rs. 12,65,500/-. However, the liquidation costs have exceeded the initially estimated amount due to extension of liquidation process beyond one year from the liquidation commencement date. Accordingly, the total liquidation cost incurred by the Applicant amounts to Rs. 29,41,163/-.

In compliance with Regulation 13 and 34(4) of the IBBI (Liquidation Process) Regulations, 2016, the erstwhile liquidator filed the preliminary report and asset memorandum report before this Tribunal on 3^rd September 2022.

In compliance with Regulation 15 of IBBI (Liquidation Process) Regulations, 2016 the erstwhile liquidator filed the following progress reports during the liquidation process:

The list of Progress Reports filed by the present Liquidator is given below:

The present liquidator, upon taking hand-over from the erstwhile liquidator, received the latest audited financial statements for the year ended 31^st March 2020. Due to the non-availability of past records of the Corporate Debtor beyond FY 2019-20 as well as statutory login credentials, including but not limited to Income Tax and GST, the present liquidator has been unable to file the updated financial statements or statutory returns of the Corporate Debtor. The present liquidator took efforts to reset the Income Tax login credentials by addressing the issue to the Income Tax Department through emails dated 10^th January 2025, 4^th February 2025, and 13^th February 2025. However, as of date, the issue remains unresolved.

The Final Report as per Regulation 45 of the IBBI Liquidation Regulations, 2016 is submitted by the Liquidator along with this Application. Further, the compliance certificate in Form H field under Regulation 45(3) of the said Liquidation Regulation is also annexed to this Application.

The erstwhile liquidator handed over the liquidation account to the present liquidator on 16th February 2024, details of which are as under:

The Applicant has submitted that there is a credit balance of Rs. 4,18,128/- in the liquidation account of the Corporate Debtor as on 7th April 2025.

Furthermore, pursuant to order of this Tribunal dated 07.07.2025, the Liquidator has filed an additional affidavit placing on record the receipt and payment statement for the period 16.02.2024 to 31.03.2025, certified by a Chartered Accountant. The statement reflects a closing balance of Rs. 4,18,127.92, which has been handed over to the successful bidder. Further, a bank closure certificate dated 25.07.2025 has been filed, confirming that the Corporate Debtor’s bank account (No. 000312100125504) has been closed on 24.07.2025.

On perusal of the Form H, it is noted that, no PUFE transactions were determined by the Liquidator/stakeholders and hence, no such applications are filed/pending before this Tribunal.

Heard the Counsel for the Liquidator and perused the records.

At this juncture, it is relevant to take note of the Regulation 45(3) of the IBBI (Liquidation Process) Regulations, 2016, which is as under:

From the perusal of the Application along with the final report and the Compliance Certificate filed in Form-H by the Liquidator, it is seen that the Corporate Debtor has been successfully sold as a going concern to the successful bidder.

In view thereof, we are inclined to allow the present application under Regulation 45(3)(a) of the Liquidation Regulations, 2016.

Accordingly, we hereby order closure of liquidation proceedings of the Corporate Debtor i.e. Mithila Cars Private Limited with the following directions:

Accordingly, the I.A. No. 2589 of 2025 is hereby allowed and disposed of and C.P. No. 939 of 2020 is hereby closed.

Files to be consigned to records.