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Judgment
Per: Bidisha Banerjee, Member (Judicial)
This court convened via hybrid mode.
I.A. (Liq) No. 5/KB/2022 is an application filed praying for liquidation of the corporate Applicant .
Brief facts
This Adjudicating Authority vide its order dated 29 November 2023 directed initiation of the Corporate Insolvency Resolution Process ('CIRP') of Ashoka Design LLP ("Corporate Applicant"), under section 10 of the Insolvency and Bankruptcy Code, 2016 ('the Code') and appointed Mr. Udit Agarwal as the Interim Resolution Professional ('IRP').
In terms of section 15 of the Code, public announcement was made and the Committee of Creditors ("CoC") was formed with viz. Union Bank of India.
In the 1st CoC meeting held on 29 December 2023, the CoC appointed Mr. Udit Agarwal as a the Resolution Professional.
In the 1st CoC held on 29 December 2023, the RP informed CoC members that the company doesn't have any business activity. The RP visited the registered office of the company, and found several other companies are running from the location of the company. The company does not have any office on its own name. Further, RP informed CoC that there is no fixed asset in the name of the company apart from inventories amounting to Rs 1,73,125/ as on 29.11.2023 as per the Financial Statement provided by the Suspended Management and trade receivable and short-term loans and advances.
The RP appraised CoC that the company is not financially viable to continue as going concern with CIRP. Further the company doesn't have any business, therefore the viability of the company and possibility of the company to attract suitable Resolution is almost negligible.
The 2nd CoC held on 31.01.2024. Both the 1st and 2nd CoC confirmed on 19.02.2024.
The CoC with 100% Voting Share, approved the Liquidation of the Corporate Applicant.
I.A. (IB) No. 05/KB/2024
This is an application filed by RP seeking liquidation of the Corporate Applicant, viz., Ashoka Design LLP, on the ground that there is no scope of resolution, especially in the view of the fact there is no business.
The Applicant has sought for the following reliefs:
a. Direction be passed initiating Liquidation of Corporate applicant as per section 33 of the Insolvency and Bankruptcy Code, 2016.
b. And/or to pass such other order or orders as this Hon'ble Tribunal may deem fit and proper.
Analysis and Findings
We have considered the submission made by the Ld. Counsel and perused the record.
Section 33 (2) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Applicant when the CoC with 66% approves the Liquidation of Corporate Applicant.
Hence, we do find merit in the prayers made in I.A. (Liq.) No. 5/KB/2024, and deem it fit to order liquidation of the Corporate Applicant.
This Bench, therefore, hereby orders as follows: -
a. Prayers as sought for in I.A. (Liq) No. 5/KB/2024 filed by RP, is allowed and Ashoka Design LLP., the Corporate Applicant is ordered to be liquidated in terms of section 33 of the Code;
b. Brinda Bidasaria having registration no. IBBI/IPA-001/IP-P-02818/2023-2024/14329, is hereby appointed as Liquidator is hereby appointed as Liquidator as provided under section 34(1) of the Code subject to a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which she is a professional member,
c. The Liquidator shall initiate liquidation process as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
d. Public Notice shall be issued in the newspapers stating that the Corporate Applicant is in liquidation.
e. All the powers of the Board of Directors, and of key managerial persons, shall cease to exist in accordance with section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator.
f. The personnel of the Corporate Applicant are directed to extend all assistance and co-operation to the Liquidator as required by him in managing the liquidation process of the Corporate applicant.
g. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Applicant save and except the liberty to the liquidator to institute suit or other legal proceeding on behalf of the Corporate Applicant with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Code read with its proviso.
h. In accordance with section 33(7) of the Code, this liquidation order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate applicant except to the extent of the business of the Corporate Applicant continued during the liquidation process by the Liquidator.
In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, within whose jurisdiction the Corporate Applicant is registered.
The application bearing IA (Liq) No. 5/KB/2024 shall stand disposed of in accordance with the above directions.
List the main CP (IB) No. 164/KB/2023 for reporting progress on 25.04.2024.
The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.
Certified copy of this order may be issued, if applied for, upon compliance of all requisite formalities.