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Judgment
Per: SANJIV JAIN, MEMBER (JUDICIAL)
This is a Company Application filed by the Liquidator in relation to the voluntary liquidation of Afchem Distribution Private Limited having CIN: U51909TN2017FTC116398, under Section 59(7) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”), seeking dissolution of the Company.
The Applicant Company was incorporated on 02.05.2017 under the provisions of the Companies Act, 2013. The main object of the Company was to buy, sell, import, trade or otherwise deal or manufacture, produce, refine, process, formulate in all type of heavy and light chemicals, chemical elements and compounds, etc. The details of the main objects are set out in the Memorandum of Association which is filed along with the typed set.
It is submitted that the Applicant Company has not been carrying on any business for the preceding two years and not earning any profits except income from investments. The Board of Directors of the Company has considered the matter and was of the opinion that due to non – availability of business prospect and long terms financial resources, it is not financially viable to carry on the business activities of the Company and proposed to close down the Company by way of voluntary liquidation. Hence, the Board of Directors in their meeting held on 20.07.2021 passed a proposal to liquidate the Company voluntarily as per the provisions contained under Section 59 of the Insolvency and Bankruptcy Code, 2016.
It is submitted that in the Annual General Meeting of the Shareholders of the Company which was held on 23.07.2021 it was resolved to appoint the Applicant herein to act as a liquidator for conducting voluntary liquidation process in relation to the Company under Section 59 of IBC, 2016.
It is submitted that the Applicant herein has conducted the Voluntary Liquidation process in respect of the Company in Liquidator in accordance with the IBBI (Voluntary Liquidation Process) Regulations, 2017. The details of the relevant compliances as mandated under Section 59 of the IBC, 2016 read with the IBBI (Voluntary Liquidation Process) Regulations, 2017 are listed hereunder:-
| S. NO | COMPLIANCE | AVERMENTS | PAGE NO. IN THE APPLICATION |
|---|---|---|---|
| 1 | Sec. 59(3)(a) | Declaration by way of an Affidavit from majority of the Directors | Annexure – B4, Pg. No.53 |
| 2 | Sec. 59 (3)(b)(i) | Audited Financial statements and record of business operations for the previous two years | Annexure – B2 and B3 Pg. No. 53 |
| 3 | Sec. 59 (3)(b)(ii) | Valuation Report | Since there is no immovable / movable assets, no valuation has been conducted |
| 4 | Sec. 59 (3)(c)(i) | Special Resolution requiring the Company to be liquidated voluntarily and appointing an insolvency professional within 4 weeks from the Declaration made under Section 59(3)(a) | Annexure – D1 Pg. No.98 |
| 5 | Proviso to Sec.59(3)(c) | Approval of Resolution passed under Section 59(3)(c) by Creditors (2/3rd in value), if any within 7 days from the date of Resolution | Annexure – E Pg. no. 103 |
| 6 | Sec.59(4) | Intimation to RoC & IBBI within 7 days from the date of Resolution under Section 59(3)(c) or after approval of Creditors | Annexure – F Pg. No. 108 & 109 |
| 7 | Regulation 14 | Form A Public Announcement within 6 days from the date of appointment | Annexure – F1, F2 and F3 Pg. No. 104 |
| 8 | Regulation 30 | List of Stakeholders in case of Claims under Chapter V of the Regulations | There are two creditors of the Company and the list has been given in the Application at para 13. |
| 9 | Regulation 9 | Preliminary Report along with the proof of submissions of the same to the Company within 45 days from LCD | Annexure – H, Pg. No.123 |
| 10 | Regulation 34 | Opening of Bank Account in the name of the Company – HDFC Bank and Proof of Clause of the above bank account. | Annexure – P Pg. No.150 |
| 11 | Regulation 35 | Proof of Distribution within 6 months from the receipt of realization | Annexure – M Pg. No.138 |
| 12 | Regulation 38 | Final Report along with proof of submission of the same to RoC and IBBI | Annexure – N Pg. No. 145 |
| 13 | Regulation 37 | Completion of Liquidation process within twelve months from LCD | Annexure – M Pg. No.138 |
| 14 | Regulation 37 | Annual Status Report | Annexure – M Pg. No.138 |
| 15 | Section 178 of IT Act, 1961 | Intimation to the IT Department and request for NOC | Annexure – J Pg. No. 126 |
| 16 | Reg 38 | Form-H – Compliance certificate dated 08.07.2022 | 140 – 144 |
It is submitted that the Liquidator has not received any claims from the Financial Creditor. Based on the verification of books and claims received from the creditors of the Company, the liquidator made payments to the creditors in the following manner:
| S. NO. | NAME OF THE CREDITOR | AMOUNT IN (₹) |
|---|---|---|
| 1 | Sri Raghav | 10,000/- |
| 2 | Statutory Dues | 1,10,740/- |
It was submitted that post payment of the aforesaid amount to the Operational Creditors there is no amount left to distribute to the Members of the Company and the only asset bank account of the Company was fully liquidated. The Amount Realized and the amount Distributed by the Applicant in the voluntary liquidation process is as under;
REALIZATION
| S. NO. | PARTICULARS | AMOUNT (₹) |
|---|---|---|
| (1) | (2) | (3) |
| 1 | Sale of Assets | Nil |
| 2 | Refund from Statutory Authorities | 74,540/- |
| 3 | Cash / Bank Balance | 3,09,777/- |
| 4 | Realization of uncalled / unpaid capital contribution | Nil |
| 5 | Distribution of unsold asset | Nil |
| 6 | Any other (please specify) | Nil |
| TOTAL | 3,84,317/- |
DISTRIBUTION
| S. NO | STAKEHOLDERS UNDER SEC.52 AND 53(1) | AMOUNT CLAIMED | AMOUNT ADMITTED | AMOUNT DISTRIBUTED | AMOUNT DISTRIBUTED TO AMOUNT CLAIMED (%) | REMARKS |
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | (7) |
| 1 | Realization of Security Interest | |||||
| 2 | Liquidation Cost [Sec.53(1)(a)] | 2,63,577.47 | 2,63,577.47 | 2,63,577.47 | 100 | Liquidation Cost |
| 3 | Workmen's Dues [Sec.53(1)(b)(ii)] | 0 | 0 | 0 | 0 | N/A |
| 4 | Debts of secured Creditors | 0 | 0 | 0 | 0 | N/A |
| 5 | Wages and Unpaid Dues to Employees [Sec.53(1)(c)] | 0 | 0 | 0 | 0 | N/A |
| 6 | Debts of Unsecured Financial Creditors [Sec.53(1)(d)] | 0 | 0 | 0 | 0 | N/A |
| 7 | Government Dues + Amount unpaid following Enforcement of Security Interest [Sec53(1)(e)] | 1,10,740 | 1,10,740 | 1,10,740 | 100 | TDS and Income Tax Dues |
| 8 | Any Remaining Debts and Dues [Sec53(1)(f)] | 10,000 | 10,000 | 10,000 | 100 | Audit Fees |
| 9 | Preference Shareholders [Sec.53(1)(g)] | 0 | 0 | 0 | 0 | N/A |
| 10 | Equity Shareholders [Sec.53(1)(h)] | 0 | 0 | 0 | 0 | N/A |
| TOTAL | 3,84,317.47 | 3,84,317.47 | 3,84,317.47 | 100 |
We have heard the Counsel for the Applicant / Liquidator and perused the record. On examining the submissions made by the Learned Counsel for the Applicant and perusing the documents annexed to the Application, we find that the affairs of the Company have been completely wound up and the assets of the Applicant Company have been completely liquidated and as such the Applicant Company deserves to be dissolved. Accordingly, in exercise of the powers conferred under Section 59(8) of IBC, 2016, we hereby order the dissolution of Afchem Distribution Private Limited. The Applicant Company shall stand dissolved from the date of this order. The Company Petition stands allowed.
The Registry and the Liquidator are directed to serve copy of this order upon the Registrar of Companies, Chennai, and also to IBBI, within 14 days from the date of this Order.