AI Structured Summary
Not yet generated for this judgment
Judgment
Per: Shri Hemant Kumar Sarangi Hon’ble Member (Technical)
Under adjudication is an application IA-10/2022, filed by Mr. Chanchal Dua (applicant/Liquidator), for the Corporate Debtor Viz., M/s. SBJ Exports & Mfg Pvt Ltd. The Application is filed under Section 54(1) of the Insolvency and Bankruptcy Code, 2016 (IBC,2016) r/w Regulation 45 of IBBI (Liquidation Process) Regulations, 2016 (Liquidation Regulations).
The reliefs sought by the Applicant are as follows: -
a. Allow the present application and dissolve the Corporate Debtor i.e., M/s. SBJ Exports &Mfg. Pvt Ltd. under Section 54 of IBC, 2016.
b. Consequently discharge the Applicant i.e., Mr. Chanchal Dua, the Liquidator of the Corporate Debtor.
c. Pass such other further order/orders (s) as this Tribunal may deem fit and proper in the facts and circumstances of the case.
Originally, CP (IB)-659/2016, was filed by the Operational Creditor viz., M/s. BCC Fuba India Limited, under Section 433,434 and 439 of the Companies Act, 1956, for winding up of the Corporate Debtor viz., M/s. SBJ Exports & Mfg. Pvt. Ltd (Corporate Debtor). The said application was transferred to this Tribunal, pursuant to the notification No. G.S.R. 119(E) & S.O. 3676(E), dated 07.12.2016, issued by the Ministry of Corporate Affairs, Government of India.
This Tribunal vide Order dated 16.08.2017, initiated the Corporate Resolution Process and appointed the Interim Resolution Professional. The Committee of Creditors in the 7th Meeting resolved to liquidate the Corporate Debtor and therefore, an application was filed for liquidation. This Authority vide Order dated 16.11.2018, initiated the Liquidation proceedings and appointed the applicant as the Liquidator. The applicant on 20.11.2018 made publication in two newspapers, in terms of Section 33(b)(ii) of the IBC,2016 r/w Regulation 12 of the Liquidation Regulations,
The applicant submitted a copy of the Order alongwith Form B on 20.11.2018, to the Insolvency and Bankruptcy Board of India (IBBI) and intimated Registrar of Companies (RoC), about the initiation of the Liquidation Process, vide e-filing Form INC-28 on 12.12.2018, which was duly approved by the RoC on 17.12.2018. The applicant verified and admitted the claims of two Financial Creditors namely, Axis Bank Limited and Punjab National Bank (erstwhile Oriental Bank of Commerce) (Financial Creditors) for a total amount of Rs.57,64,77,594.01 (Rupees Fifty-Seven Crore Sixty-Four Lakh Seventy-Seven Thousand Five Hundred Ninety-Four Paise One) and also of one Operational Creditor namely, Deputy Commissioner of Income Tax, Circle 22 (2), New Delhi for an amount of Rs. 2,92,97,877 (Rupees Two Crore Ninety-Two Lakhs Ninety-Seven Thousand Eight Hundred Seventy-Seven).
The applicant opened the Liquidation account of the Corporate Debtor with Yes bank in terms of the Regulation 41(1) of the Liquidation Regulations. The applicant appointed Charted Accountant Mr. Atul Mishra, to conduct the audit of the books of accounts of the Corporate Debtor for the period from 01.04.2018 to 16.11.2018. The Financial Creditors in terms of Section 52(1) (a) of the IBC, 2016, submitted the relinquishment letters dated 07.03.2019 and 05.04.2019, respectively.
The 1st meeting of the Stakeholders’ Consultation Committee (SCC) was held on 03.04.2019, in terms of the Section 35(2) of the IBC, 2016. The advertisement in three newspapers was released on 26.04.2019, for the 1st E-Auction of the assets of the Corporate Debtor in terms of Regulation 33 and Schedule I of Liquidation Regulations. The applicant made 2nd Public Announcement on 10.06.2019, since no bidder took part in the bidding process on the date of 1st E-Auction i.e., on 29.06.2019 and no Earnest Money Deposit (EMD), was received from any prospective bidders, on or before the E-Auction.
The applicant, as per the decision of the SCC, reduced the price of assets of the Corporate Debtor and published for the E-Auction Sale notice on 05.08.2019, however, despite the efforts of the applicant, no bidder took part in the bidding process of the 3rd E-Auction conducted on 22.08.2019.
The SCC in its 2nd meeting held on 09.09.2019, decided to ascertain fresh realizable value of the assets of the Corporate Debtor by two valuers to conduct fresh E-Auction on the fresh values. The applicant on 04.11.2019, appointed valuers, registered with the IBBI for each asset class. The summary of the realizable values provided by the valuers are as under:
| Valuation Summary | |||
|---|---|---|---|
| Sl. No. | Name of the Valuers | Asset Class | Realizable Value (in Rs.) |
| 1. | Mr. Dhiraj Jaiswal | Land &Building | 1,01,25,000 |
| 2. | Mr. Arvinder Atwal | Land & Building | 1,00,54,995 |
| 3. | Mr. Paramjeet Singh | Plant & Machinery, Furniture, office equipment | 82,98,000 |
| Inventory | 25,41,022 | ||
| 4. | Mr. Nandu Ram Sharma | Plant & Machinery, Furniture, office equipment | 81,51,000 |
| Inventory | 25,41,000 | ||
| 5. | CA Suresh Kumar Goyal | Security and Financial Assets | -- |
| 6. | Mr. Mohit Sagar | Security and Financial Assets | -- |
It is stated that the average realizable value of the total assets of the Corporate Debtor, as per the valuation reports is Rs 2,08,55,509 (Rupees Two Crore Eight Lakh Fifty-Five Thousand Five Hundred Nine). The applicant opened new liquidation account with ICICI Bank, as there were issues in operating the Yes Bank account.
The applicant published the 13th e-Auction Sale notice on 19.09.2020. The date for E-Auction was fixed as 07.10.2020 (E-Auction date) and the applicant received the EMD of Rs 19 Lakhs alongwith the bid documents from one interested buyer i.e., M/s. Events Corporation (a partnership firm having partner Mr. Puneet Batra and Mr. Manoj Arora) and on the E-Auction date, the bidder placed the bid at the reserve price fixed at Rs 1.90 Crores. The applicant conducted verification of the transaction, the bidder viz., M/s. Events Corporation was declared as the Successful Bidder, however, on 07.10.2020, an email was received by the applicant from M/s. Events Corporation (Successful Bidder), seeking time to submit remaining amount in accordance with the provisions of the Liquidation Regulations. The applicant in reply, informed the Successful Bidder that the remaining sale consideration amount of Rs. 1,87,02,000 was to be paid on or before 06.11.2020 i.e., the 30th day of e-auction.
The successful Bidder, through an email dated 04.11.2020, informed the applicant that in case of delay, the balance sale consideration would be paid with 12% interest and vide email dated 11.11.2020, requested for extension of 60 days for payment of remaining sale consideration, thereby extending the timeline till 05.01.2021. The Successful bidder remitted the full sale consideration on 01.01.2021. The applicant issued a Sale Certificate dated 06.01.2021, which was acknowledged and received by the Successful Bidder. A possession letter was issued to the Successful Bidder on 11.01.2021.
The applicant sought for extension of the Liquidation period for a period of six months (23.01.2021 to 21.07.2021), as the Liquidation Period was to end on 22.01.2021 and vide Order dated 22.02.2021, this authority allowed the extension of Liquidation period. The Applicant, after receiving e-mail confirmations from each secured financial Creditors and after adjusting the CIRP and Liquidation costs, on 16.03.2021, distributed the sale proceeds of Rs 1,90,00,000 (Rupees One Crore Ninety Lakh) plus interest of Rs 2,98,290 (Rupees Two Lakh Ninety-Eight Thousand Two Hundred Ninety), paid on delayed payment, in terms of Section 53 of IBC, 2016, as under:
| Sl. No. | Amount transferred in the bank accounts and Branch | Amount (in Rs) |
|---|---|---|
| 1. | Axis Bank Limited, Rajouri garden (CIRP Cost + Advances Return) | 37,27,062 |
| 2. | Axis Bank Limited, Palam (Distribution under Liquidation) | 62,76,609 |
| 3. | Punjab National Bank (CIRP Cost + Advances Return) | 20,22,499 |
| 4. | Punjab National Bank (Distribution under Liquidation) | 34,49,945 |
| Total | 1,54,76,115 | |
This Authority vide Order dated 25.08.2021, extended the Liquidation period w.e.f. 21.07.2021 to 17.01.22. The applicant sought permission for sale of Not Readily Realizable Assets (NRRA) in terms of Regulation 37A of the Liquidation Regulations and this Authority permitted the same vide Order dated 02.08.2021. The applicant notified in the newspapers on 16.09.2021, for the sale of the NRRA and in consultation with the Financial Creditors, confirmed the assignment of the NRRA, on the offered consideration value of Rs. 1,00,000 (Rupees One Lakh), to the Financial Creditors, in their voting share i.e., Axis Bank Limited @ 64.53% and Punjab National Bank @35.47%. The applicant prepared and filed the Asset Sale report in accordance with Regulation 36 of the Liquidation Regulations.
The applicant states that the liquidation cost incurred till date is Rs. 4,21,790 (Rupees Four Lakh Twenty-One Thousand Seven Hundred Ninety) and balance left in the liquidation bank account is Rs 7,73,697 (Rupees Seven Lakh Seventy-Three Thousand Six Hundred Ninety-Seven). The applicant took steps to close the bank account of the corporate debtor with ICICI Bank. The applicant filed the preliminary report and asset memorandum with this Authority on 30.1.2019. The applicant received email dated 21.07.2021, about the closure of the Current Account with State Bank of India, Palam Branch, in the name of the Corporate Debtor.
The applicant prepared the Final Report prior to the dissolution, in terms of the Regulation 45 of Liquidation Regulations. The report covers the period from 16.11.2018, till 17.01.2022, and specifies the steps taken for conducting the Liquidation process of the Corporate Debtor. The last Annual General Meeting was held on 30.09.2015, as per the records and there is non-filing of the Annual Returns and the Financial Statements with the RoC, which attracts penalty of Rs. 100 per day. The applicant was not able to file the prescribed forms, as the Corporate Debtor is not in operation for the last three and half years and is not able to pay the penalty due to the non-availability of funds with the Corporate Debtor. The applicant requested the RoC, vide letter dated 22.04.2019, for updating the status of the Corporate Debtor from 'Active' to 'Under Liquidation' on the portal of Ministry of Corporate Affairs.
The applicant had received notice dated 14.11.2018, from the Income Tax Department (IT Dept), under section 142(1) of the Income tax Act, 1961, wherein certain documents and information were requested from the Corporate Debtor for the A.Y. 2016-17. The applicant replied on 26.11.2018, intimating about the initiation of the Liquidation Proceedings and moratorium for all the proceedings against the Corporate Debtor. Further, the applicant received a Show Cause notice alongwith the demand notice, Assessment Order dated 10.12.2018 and the Computation Sheet for A.Y. 2016-17. The applicant replied on 27.12.2018 and appraised the IT Dept about the initiation of the Liquidation Proceedings and moratorium for all the proceedings against the Corporate Debtor under Section 33(5) of the IBC, 2016.
The IT Dept raised demands vide letters dated 22.01.2019 and 04.02.2019. The applicant replied vide letters dated 05.02.2019 and 07.02.2019 and informed that the claims filed by the IT Dept for Rs 2,92,97,877 (Rupees Two Crore Ninety-Two Lakh Ninety-Seven Thousand Eight Hundred Seventy-Seven), were duly admitted and the list of stakeholders was filed before this Authority. The applicant received notice under Section 271 (1)(c) of the Income Tax Act, 1961, dated 09.12.2018, through email on 23.05.2019, to which the applicant replied on 24.05.2019, stating that the IT Dept cannot proceed against the Corporate Debtor till the completion of the Liquidation Process and further requested to withdraw the above-mentioned notice in view of the moratorium in effect, as per the IBC, 2016. The IT Dept initiated penalty proceedings for the A.Y 2016-17, vide order dated 18.06.2019. The IT Dept continued issuing notices against the Corporate Debtor, therefore, the applicant filed an application before this Authority against the Demand notices for an amount of Rs 6.48 crore for A.Y 2016-17 and penalty Order dated 18.06.2019 for A.Y. 2016-17, issued by IT Dept on 10.07.2019.
This Authority vide Order dated 19.08.2019, had set aside the Orders of IT Dept dated 10.12.2018 and 18.06.2018. Subsequently, the applicant received notices from the IT Dept dated 20.11.2021, 21.11.2018 and 28.12.2021 for A.Y. 2014-15 and A.Y 2015-16, to which the applicant replied and uploaded on the website of IT Dept. The applicant took steps for fresh GST registration during the Liquidation Process. The applicant regularly filed the GST Returns and deposited the applicable GST. The notice dated 09.09.2021, cancelling the GST registration, was received through the GST portal. The applicant replied on 22.10.2021, requesting to reinstate the GST registration in view of the moratorium under Section 33 (5) of IBC, 2016. However, the GST registration was not reinstated, and the applicant took necessary steps for surrender the GST registration as the liquidation process got completed.
The audit of the Receipts and payments account of the Corporate Debtor was conducted by M/s MS Negi & Associates for the period from 01.04.2021 to 15.01.2022 (closure of the bank account). The applicant vacated the registered office of the Corporate Debtor and shifted the records stored at the site, to M/s. Aided Reco Management Pvt. Ltd, a record management Company. A tripartite agreement was executed for preservation of the records for eight years after date of liquidation of the Corporate Debtor as per the provisions of the IBC, 2016 and the possession of the property was given to the landlord.
The compliance certificate in Form H, as per Regulation 45(3) of the Liquidation Regulations is annexed and marked as ANNEXURE A-36. The Form H, states that the Fair Value of the liquidation estate is Rs. 13.08 Crores, and the Liquidation value of the liquidation estate is Rs 8.07 Crores, however in the 13th E-Auction the reserve price was Rs. 1.9 crore. The amount was realized from E-Auction sale of the Liquidation estate and the NRRA were sold through inviting offer for an amount of Rs. 1 lakh, which was transferred to the liquidation account on 01.01.2021 and 13.01.2022 respectively.
It is averred that the applicant has complied with all the provisions of the IBC, 2016 and Liquidation Regulations also the Liquidation process stands completed before the expiry of the period of Liquidation Process i.e., 17.01.2022.
In view of the above, and the other details provided in the Application under consideration and the record placed on file, this Authority, in exercise of the powers conferred under Subsection (2) of Section 54 of the IBC, 2016, hereby Orders the dissolution of the Corporate Debtor, viz., M/s. SBJ Exports & Mfg. Pvt. Ltd, from the date of this Order, and the Corporate Debtor stands dissolved. Consequently, the Liquidator stands relived.
The applicant and the Registry are directed to send the copy of this Order within 7 days from the date of pronouncement to the RoC, with which the Corporate Debtor is registered.
In terms of the above, the Application IA-10/2022 is disposed of.
The Order is pronounced through Video Conferencing.