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Judgment
ORDER
This is an Application filed under Section 54(1) of the Insolvency and Bankruptcy Code, 2016 (Code/IBC) on 13.04.2023, by Mr. Devendra. P. Jain, Liquidator (Applicant/Liquidator) of the Corporate Debtor (CD), seeking dissolution of the Corporate Debtor, viz., Richa Creation India Private Limited.
2. BACKGROUND
The Applicant submits that Corporate Insolvency Resolution Process (CIRP) of the CD was initiated under section 7 of IBC vide order dated 16.08.2017. The Applicant was appointed as the Interim Resolution Professional (IRP) by the Tribunal. Subsequently, the Applicant was confirmed as the Resolution Professional (RP).
The Applicant submits that due to non-resolution of the CD in the CIRP period, the Committee of Creditors (CoC) of the CD passed the resolution for initiation of liquidation of CD. Based on the recommendations of the CoC, the Bench allowed the commencement of liquidation process of the CD and the Applicant was appointed as a Liquidator vide Liquidation Order dated 09.04.2019.
Pursuant to the Liquidation Order of the CD, Public Announcement in Form B was published on 25.05.2019, intimating the commencement of liquidation process and for inviting claims from the creditors. The Applicant/Liquidator received claims from various stakeholders. Accordingly, he constituted the Stakeholders' Consultation Committee (SCC).
The Applicant submits that in the 4th SCC meeting held on 24.09.2020, it was discussed that registered valuers need to be appointed for valuation of assets of the CD as per Regulation 35 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Liquidation Regulations, 2016 (Liquidation Process Regulations). However, the Applicant brought to the notice of the members of SCC that the assets of the CD are old, obsolete and outdated with negligible sale value and the expenses incurred from the same would be an additional cost in the liquidation process. It was also apprised by him that due to absence of adequate information and records as to fixed assets, stocks, inventory from the directors of the suspended board of the CD, a valuer would not be in a position to give any concrete report and hence, no valuers were appointed.
The Applicant submits that he published a notice of an e-auction for sale of movable assets under Regulation 33 of the Liquidation Process Regulations on 06.11.2020, however, only single bid received, and further, the Applicant published an addendum notice dated 09.12.2020, to extend the date of e-auction. In pursuance thereof, two bidders participated in the e-auction sale and the highest bidder offered Rs.1,35,000/-. The successful bidder had cleared the entire sale consideration by 19.02.2021, and accordingly, the Applicant issued a sale certificate in favour of the successful bidder and handed over the inventories.
The Applicant submits that in the meantime, he filed an Interlocutory Application against the directors of the suspended board of the CD and the Income Tax Department seeking directions of the this Tribunal against them to render full co-operation to the Applicant and to hand over the required information/documents of the CD for carrying out the liquidation process and also filed another Interlocutory Application seeking modification of the list of stakeholders of the CD, since there were various creditors who filed their claims at a very belated stage. The Tribunal allowed both the Interlocutory Applications vide order dated 28.09.2021.
The Applicant submits that he conducted the 6th SCC Meeting on 10.06.2022 and apprised the members regarding assignment/transfer of Not-Readily Realisable Assets (NRR) under Regulation 37A of the Liquidation Process Regulations as per the latest available balance sheet for year ending 31.03.2017, which was rejected by the SCC by 100% voting share.
The Applicant further submits that he conducted the 7th SCC Meeting on 29.11.2022, where it was decided to assign / transfer NRRA of the CD. Therefore, the following resolutions were put to vote before, and the same were approved by the SCC, with 96% voting share, in favour:
"Resolved that liquidator to obtain voting from members of SCC whether to assign the available assets of the CD under the provision of "not readily realizable assets" on "as is where is basis." under regulation 37 (A) of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulation, 2016."
“Further Resolved that liquidator to obtain voting from members of SCC whether to make an application before Hon’ble Adjudicating Authority for suitable directions including dissolution of the corporate debtor after outcome of effort /process of assignment of all available assets of the CD as “not readily realizable assets" on "as is where is basis" under regulation 37 (A) Insolvency & Bankruptcy Board of India (Liquidation Process) Regulation, 2016."
The Applicant further submits that made a public notice on 29.12.2022, in The Free Press Journal (English) and Navshakti (Marathi), Mumbai edition in terms of Regulation 37A of the Liquidation Process Regulations to obtain bids for NRRA of the CD; however, no bids were received by the Applicant.
The Applicant also submits that he has recovered the pending amount from the sale of available assets in the best possible manner; however, due to insufficient amount available against the expected liquidation cost, the Applicant could not distribute the proceeds amongst the stakeholders.
The Applicant further states that he opened the Bank Account in terms of the provisions of the Code. The Liquidation A/c of the CD with Bank of Baroda, has been closed and the Bank has sent a Letter dated 16.12.2023, informing that the Liquidation Account with Bank of Baroda is closed on. 14.12.2023, copy of which is filed through an Additional Affidavit.
The Applicant submits that he has attached Compliance Certificate in Form H under Regulations 45(3) of the Liquidation Process Regulations and the Final Report submitted on 15.03.2023.
The Applicant submits that the Liquidation Process could not be completed due to the reasons beyond the control of the Applicant despite his best efforts to complete the Process within the time period stipulated as per Regulation 44 of the Liquidation Process Regulations.
The Applicant also submits that there are no assets of the CD left to be liquidated, after the assignment of the NRRA and other receivables.
ANALYSIS AND FINDINGS
We have heard the ld. Counsel appeared for the Applicant/Liquidator and perused the available records.
Before considering the merits of case, it is necessary to refer to relevant provisions under the IBC/Regulations made thereunder:
Section 54 of the IBC 2016 reads:
“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 subsection (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered".
On examining the submissions made by the Ld. Counsel appearing for the Applicant/Liquidator and the documents annexed to the Application, it has been established that the assets of the CD are completely liquidated in terms of Section 54 of the IBC.
The above facts and circumstances indicate that due process of liquidation, as per extant provisions and in the manner indicated in the Code and the Liquidation Process Regulations, have been followed by the Liquidator in the Liquidation Process. Thus, it would be just and equitable to dissolve the CD and that no party is going to be adversely affected thereby. In view of the above, the CD deserves to be dissolved. Accordingly, it is hereby ordered as follows: -
Richa Creation India Private the Corporate Debtor, is hereby dissolved with immediate effect;
ii) The Registry is directed to forward a certified copy of this Order to the Registrar of Companies, Mumbai, within a period of seven days from the date of Order;
iii) The Liquidator is hereby discharged.
Accordingly, IA-1498/2023 is allowed and disposed of. Also, CP(IB)-1176(MB)/2017 is hereby closed. Files to be consigned to records.