AI Structured Summary
Not yet generated for this judgment
Judgment
This case is fixed before pronouncement of order.
The order is pronounced in open court vide separate sheet.
The present Interlocutory Application is filed by Mr. Subrata Monindranath Maity, the erstwhile Resolution Professional (RP) of Corporate Debtor M/s Eskay K ‘N’ IT (India) Ltd. under Section 33(1), 33(2) and 34(1) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of National Company Law Rules, 2016 for liquidation of the Corporate Debtor and for seeking direction to the Committee of Creditors (CoC) for disbursing unpaid Corporate Insolvency Resolution Professional (CIRP) Cost.
Facts of the Case:
The Applicant submits that the CIRP of the Corporate Debtor commenced pursuant to admission of CP(IB) No. 420/7/NCLT/AHM/2018 petition filed by Bank of India, vide order dated 17.02.2020. This Tribunal inter alia appointed Mr. Vikas Prakash Gupta as the Interim Resolution Professional ('IRP'). The public announcement was issued on 24.02.2020 and 25.02.2020, and after verification of claims, the CoC was duly constituted on 16.03.2020.
The Applicant states that the 1st meeting of the CoC was held on 19.03.2020. Due to the nationwide lockdown and restrictions in Maharashtra, the next CoC meeting was held on 23.06.2020 wherein CoC resolved to replace the IRP with Mr. Subrata Monindranath Maity, the erstwhile Resolution Professional. The replacement was approved by this Tribunal vide order dated 20.08.2020.
The Applicant submits in the 3rd CoC meeting held on 14.10.2020 publication of Form-G and an application before this tribunal for exclusion of lockdown period and extension of CIRP to 330 days were approved. E-voting on the agenda items concluded on 30.10.2020. Form-G was published on 20.10.2020. The last date for submission of EOI was 05.11.2020. Since only one query requesting detailed EOI was received, the CoC in its 4th meeting dated 02.11.2020 resolved to extend the EOI deadline to 20.11.2020, and pursuant to the same extension of Form G was published.
- iv. The Applicant states that in the 5th CoC meeting, two Bid Process Advisors were considered, and the applicant suggested that on the basis of profile and investment strategy aXYKno Capital Services Pvt. Ltd. can be considered for appointment as Bid Process Advisors. - v. It is further submitted that in the 6th CoC meeting dated 08.12.2020, the CoC considered issues relating to appointment of Kanitkar Advisory LLP for the purpose of asset investigation of CD, legal notices to be sent to Shakti Procon Pvt Ltd., Initiation of recovery actions from the Debtors, and confirmation of appointment of M/s aXYKno Capital Services Pvt. Ltd. as Bid Process Advisors along with their fees. Amongst other things agenda for appointing M/s aXYKno Capital Services Pvt. Ltd. as Bid Process Advisors and filing an application before NCLAT for seeking exclusion of lockdown period and extension of CIRP to 330 days were approved. - vi. It is submitted that the 7th CoC meeting was held on 10.06.2021, wherein two EOIs one from Gatiman Textile Industries Pvt. Ltd. and another from Om Heritage Spring Realty Pvt. Ltd. both received through M/s aXYKno Capital Services Pvt. Ltd. However both were found to be ineligible as they did not meet the criteria specified in the EOI. The RP also apprised the CoC of attempts to reach large textile players such as Welspun Group and Arvind Ltd., who declined participation due to complex asset structure of the Corporate Debtor, particularly its land holdings.
- vii. It is stated that since the CIRP period was ending on 21.06.2021, the CoC deliberated on the options available either to seek exclusion of lockdown period and invite fresh EOIs or to give approval for filing application for initiation of liquidation process of CD as per section 30(a) of the Code. The CoC unanimously formed the view that the likelihood of receiving any resolution plan was negligible and resolved to initiate liquidation of the Corporate Debtor. - viii. The Applicant i.e., erstwhile RP informed CoC members that due to his health issues and other engagements, he expressed his unwillingness to act as the Liquidator and requested for appointment of new insolvency professional as liquidator. Bank of India suggested the name of Mr. Ajit Kumar, subject to final approval. CoC members than suggested to conduct joint lenders meeting at the earliest to discuss appointment and proposed fee of liquidator.
It is further submitted that in the 8th CoC meeting dated 25.06.2021, the CoC approved filing of an application under Section 33(a) and appointment of Mr. Ajit Kumar, IBBI Reg. No: IBBI/IPA-003/IP-N00062/2017-18/10548 as Liquidator for conducting liquidation process of M/s Eskay K 'N' IT (India) Ltd which was approved with 100% voting share, with remuneration as per Regulation 4 of the Liquidation Process Regulations, 2016.
The Applicant i.e., erstwhile RP states that during the said meeting, he requested the CoC to release the pending CIRP costs at the earliest and apprised that Bank of India has deposited its share of CIRP expenses in the CIRP account. At this state the CoC members enquired about realisation of IDBI Bond, erstwhile RP informed that he is in communication with the IDBI team and since the bonds are 1993 series and digitally converted and due to lack of supporting documents/record available on historical data about any receipt of interest by CD, the realisation shall take time and legal recovery process is to be initiated by filing application with adjudication authority. The RP placed before the CoC in the 7th meeting a detailed statement of CIRP costs till 31.05.2021 where total CIRP Expenses were stated as Rs.1,47,27,645.04
It is further stated that the share of CoC members in CIRP expenditure and the amount actually released by CoC members till 27.07.2021 is as under
| S N | Name of CoC Member | % of Share in CoC | Amount (in Rs.) | Contribution Received | Request for Release of Contribution |
|---|---|---|---|---|---|
| 1 | Bank of India | 20.78% | 30,60,404.64 | 29,87,422.87 | 72,981.77 |
| 2 | Andhra Bank (Now Union Bank of India) | 17.03% | 25,08,117.95 | 65,248.00 | 24,42,869.95 |
| 3 | Bank of Baroda (Erstwhile Dena Bank) | 15.46% | 22,76,893.92 | 6,73,735.79 | 16,03,158.13 |
| 4 | Punjab & Sind Bank | 12.61% | 18,56,419.66 | 0.00 | 18,56,419.66 |
| 5 | Indian Overseas Bank | 11.84% | 17,43,016.79 | 0.00 | 17,43,016.79 |
| 6 | Karnataka Bank | 8.99% | 13,24,015.29 | 79,890.00 | 12,44,125.29 |
| 7 | Federal Bank | 8.40% | 12,37,122.18 | 1,60,750.00 | 10,76,372.18 |
| 8 | Allahabad Bank (Now Bank) Indian | 4.90% | 7,21,654.61 | 0.00 | 7,21,654.61 |
| Total | 100.00% | 1,47,27,645.04 | 39,67,046.66 | 1,07,60,598.38 |
The Applicant, by way of affidavit, placed on record subsequent developments and submitted that during the pendency of the liquidation application, the Disciplinary Committee of the Insolvency and Bankruptcy Board of India, through interim order IBBI/DC/95 (Interim)/2022 dated 09.05.2022, suspended the registration of the erstwhile RP and directed the CoC to discontinue his services and initiate replacement under Section 27 of the Code; accordingly, the CoC filed IA 466 (AHM) 2022 in CP(IB) 420 of 2018 seeking such replacement, pursuant to which this Tribunal, by order dated 02.06.2022, appointed the present Applicant, Mr. Ajit Kumar, as Resolution Professional. The Applicant further stated that, in compliance with orders dated 29.11.2022 and 04.01.2023, filed a purshis amending the cause title by substituting the name of the erstwhile RP with his own. The Applicant in the affidavit submits that under Section 34(1) of the Code, the Resolution Professional shall continue as Liquidator unless specifically replaced, and his written consent is already on record. The Applicant further clarified that this Application is confined to seeking initiation of liquidation of the Corporate Debtor, whereas issues relating to CIRP costs and the professional fees of the erstwhile RP are pending separately in IA 1049 of 2022 and may be adjudicated therein.
The Applicant filed a purshis for placing on record the affidavit on behalf of Respondent no.1 submitting that the present affidavit has been affirmed through its Authorized Representative, Shri Suhas B. Bhatnagar, Assistant General Manager, ARMS Branch, Bank of India, duly authorised to represent Respondent No.1, and further stated that a Joint Lenders Meeting was convened on 05.12.2023 wherein the consent of other member banks was obtained for filing the affidavit in support of the proceedings.
Respondent No. 1 submits that during pendency of the liquidation proceedings, the IBBI issued Circular No. Liq-12011/214/2023-IBBI/840 dated 18.07.2023 recommending appointment of an Insolvency Professional other than the IRP/RP as Liquidator from the IBBI panel. It is further submitted that initially the written consent of the Resolution Professional was received for his appointment as Liquidator of the CD however, on account of circumstances, the members of the CoC resolved to appoint the proposed liquidator as RP of the CD as the CIRP was at the last stage of application and liquidation application was already filed. Respondent No. 1 therefore asserts that in view of the resolution passed in the 8th CoC Meeting dated 25.06.2021 and the subsequent developments, the present RP, Mr. Ajit Kumar, ought to continue as Liquidator, as Section 34(1) mandates continuation of the RP unless replaced under Section 34(4), which is not attracted herein. It is submitted that his written consent is already on record and the CoC has full confidence in his conduct and efficiency, and therefore prays for his appointment as Liquidator.
The Applicant, by way of a further affidavit, submitted that this Tribunal, vide order dated 20.02.2024, had directed the RP to place before the CoC the instructions issued by the IBBI regarding appointment of the Liquidator and to revert by way of affidavit on the next date of hearing. The Applicant apprised the CoC of the Tribunal’s directions accordingly, in the 11th CoC meeting it was observed that the circumstances contemplated in the IBBI’s recommendation had not arisen in the case of the Corporate Debtor. The Applicant further submitted that in the said 11th CoC meeting, the agenda for reconfirmation of his appointment as Liquidator was put to vote, where 88.17% of the total voting share participated, and all votes cast were in favour of reconfirming his appointment, while the remaining creditors could not cast their votes.
The applicant placed their reliance on the decision of the Hon’ble NCLAT in the case of Mr. Sundaresh Bhat Liquidator of ABG Shipyard Limited [Company Appeal (AT) (Insolvency) No. 398 of 2021], wherein it was held that:
> “The Circular dated 26.08.2019, we hold is not legally enforceable to interpret applicability. Such Circular cannot be in the nature of substituting existing Regulation in the name of guidelines. The guidelines which are inconsistent with the subordinate legislation would not be enforceable. If provision is clear, external aid, that too inconsistent, cannot be applied. The provision has to be enforced by Tribunal as it is”
In compliance of order dated 15.04.2025 of this Tribunal, applicant filed affidavit for placing on record the lists of asset available with CD as well as the list of pending litigation concerning the CD. The pending litigation are as follow:
| Sr.n o | Application Details | Particulars | Court/ Tribunal |
|---|---|---|---|
| 1 | IA(I.B.C)/730/AHM/2022 Mr. Ajit Kumar Resolution Professional of M/s. Eskay K'N'IT (India) Ltd. VS Mr. Subrata Monindranath Maity | Filed by the RP seeking: • Order against erstwhile RP to cooperate. • Immediately handover the charge alongwith document. • Allow convene of CoC meetings. | NCLT Ahmedabad bench |
| 2 | M/s. Amex Infrastructure Pvt. Ltd. & ors vs. Ajitkumar RP (IA 393/2021) | Filed by alleged FC seeking: • Admission of claims with interest • Reconstitute CoC & allocate voting share | NCLT Ahmedabad bench |
| • Take fresh mandate upon the CoC which are the detrimental to the rights of the applicant | |||
| 3. | IA (I.B.C)/491/AHM/2021 Mr. Ajit Kumar Resolution Professional of M/s. Eskay K'N'IT (India) ltd. Vs Shakti Procon Pvt. Ltd | Filed by erstwhile RP seeking: • Direction to R2 (District collector of Solan, Himachal Pradesh) to facilitate handing over the vacant possession of the property of CD | |
| 4 | IA (I.B.C)/526/AHM/2021 Mr. Ajit Kumar Resolution Professional of M/s. Eskay K'N'IT (India) ltd vs Bank of India | Filed by erstwhile RP seeking: • Liquidation of the CD and appointment of present RP as liquidator • Direct CoC member to pay 1.07Cr towards fee of erstwhile RP and other cost | NCLT Ahmedabad bench |
| 5 | IA (I.B.C)/1049/AHM/2022 Subrata Moindranath Maity vs Mr Ajitkumar | Filed by erstwhile RP seeking: • Issue order directing the Respondents to clear the professional fees of the RP and other expenses incurred by the RP | NCLT Ahmedabad bench |
| 6 | IA (I.B.C)/589/AHM/2023 Vikas Prakash Gupta vs Mr. Ajit Kumar | Filed by erstwhile IRP seeking Payment of professional fee | NCLT Ahmedabad bench |
| 7 | IA (I.B.C)/1788/AHM/2024 Mr. Ajit Kumar Resolution Professional of M/s. Eskay K'N'IT (India) ltd vs Express Suitings Private limited | Filed by the RP seeking: • Application filed under section 66 and 45 of the code for an amount totalling to INR 634.7992 Cr | NCLT Ahmedabad bench |
| 8 | IA (I.B.C)/1809/AHM/2024 Mr. Ajit Kumar Resolution Professional of M/s. Eskay | Filed by the RP seeking: • Application filed in regard to the | NCLT Ahmedabad |
| K'N'IT (India) Ltd vs Subrata Moindranath Maity and ors | unauthorized payments made by the Erstwhile RP in the head of the CIRP costs | bench |
We have heard the counsel for the Applicant and the Respondents submissions and have perused and considered the material placed before us.
10. Observations:
It is submitted that in the 8th CoC meeting dated 25.06.2021, the CoC approved filing of an application under Section 33(a) and appointment of Mr. Ajit Kumar, IBBI Reg. No: IBBI/IPA-003/IP-N00062/2017-18/10548 as Liquidator for conducting liquidation process of M/s Eskay K 'N' IT (India) Ltd which was approved with 100% voting share, with remuneration as per Regulation 4 of the Liquidation Process Regulations, 2016.
The CD is under liquidation for a considerable period mainly due to pending IAs and the litigations on the assets of the property. The RP has not been able to put up a proposal for revival of the CD. Hence we may allow the proposal to liquidate the CD. We appoint another liquidator to conduct the liquidation process in terms of IBBI issued Circular No. Liq-12011/214/2023-IBBI/840 dated 18.07.2023 recommending appointment of an Insolvency Professional other than the IRP/RP as Liquidator from the IBBI panel. We approve the proposal of the applicant which is submitted with the approval of COC under Sec 33(2) of IBC 2016 and replace the RP with new liquidator under Sec 33(4)(b) and the charges to the liquidation process will be in terms of Sec 33(4)(8) and (9) of IBC 2016 and will function in terms of the powers and duties specified under Sec 35 of IBC 2016.
ORDER
I. IA 526 of 2021 in CP (IB) 420 of 2018 is allowed.
II. The Liquidation of Corporate Debtor- Debtor M/s Eskay K 'N' IT (India) Ltd. is effective from the date of this order and the Moratorium declared vide order dated 17.02.2020 in CP(IB) 420 of 2018, henceforth ceases to exist from the date of the order of liquidation.
III. In terms of the IBBI, circular number 12011/214/2023-IBBI/840 dated 18.07.2023 we hereby appoint Mr. Sunit Jagdishchandra Shah having registration no. IBBI/IPA-001/IP-P00471/2017-2018/10814 and email id- [email protected] as per the panel suggested by IBBI for this Bench as the Liquidator of the Corporate Debtor to carry the liquidation process. The Liquidator so appointed shall complete the Liquidation process as per the provisions of the Insolvency and Bankruptcy Code, 2016 r.w. Insolvency and Bankruptcy Board of India (Liquidation process) Regulation, 2016.
IV. All the powers of the Board of Directors, key managerial persons, and the partner of the Corporate Debtor, as the case may be, hereafter cease to exist. All these powers henceforth vest with the Liquidator
V. The personnel of the Corporate Debtor are directed to extend all cooperation to the Liquidator as required by him in managing the liquidation process of the Corporate Debtor.
VI. The Liquidator will charge fees for the conduct of the liquidation proceedings in proportion to the value of the liquidation estate assets as specified by IBBI and same shall be paid to the Liquidator from the proceed of the liquidation estate under section 53 of the Code.
VII. Once the liquidation process is initiated, subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. The Liquidator has the liberty to institute a suit and other legal proceedings on behalf of the Corporate Debtor with the prior approval of this Adjudicating Authority, as provided in sub-section (5) of section 33 of the Code.
VIII. This liquidation order shall be deemed to be notice of discharge to the officers, employees, and workmen of the Corporate Debtor except to the extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator.
IX. The CoC is directed to contribute to the liquidation cost if any short fall occurs from the liquidation value of the Corporate Debtor.
X. This Adjudicating Authority directs the Liquidator to issue a public announcement stating that the Corporate Debtor is in liquidation. The Liquidator will also serve a copy of this order to the various Government Departments such as Income Tax, GST, VAT, etc., who are likely to have any claim upon the Corporate Debtor so that the authorities concerned are informed of the liquidation order timely. The Liquidator will also provide a copy of this order to the trade unions/employee associations of the Corporate Debtor so that the workmen/employees could also be informed of this liquidation order through their association.
XI. The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section - 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company Applications during the process of liquidation.
XII. The present Resolution Professional is directed to hand over the relevant documents and control of the Corporate Debtor to the newly appointed liquidator forthwith.
XIII. The Registry is directed to communicate this order to the concerned Registrar of the Companies, the registered office of the Corporate Debtor, IBBI, the resolution professional, and the Liquidator by speed post as well as e-mail within one week from the date of this order, after completion of all the formalities.
XIV. Accordingly, the present I.A. No. 526 of 2021 stands disposed of.