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Judgment
Per: SANJIV JAIN, MEMBER (JUDICIAL)
This Application has been filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 by the liquidator of the Corporate Debtor herein seeking for an order for Dissolution of the Corporate Debtor viz., NAG LEATHERS PRIVATE LIMITED.
It is stated that CIRP of the Corporate Debtor was initiated by this Tribunal vide order dated 10.07.2017 and the Applicant herein was appointed as Interim Resolution Professional (IRP) and thereafter as Resolution Professional (RP).
It is stated that the Liquidation of the Corporate Debtor was ordered by this Tribunal on 09.04.2018 in CA/72/2018 and the Applicant herein was appointed as the Liquidator.
Pursuant to the order of Liquidation, the Applicant caused the Public Announcement on 11.04.2018 in Form –B of Schedule II by inviting claims from all the stakeholders and fixed the last date for submission of claim as 08.05.2018.
It is stated that the Applicant received claims from the following stakeholders of the Corporate Debtor. The details of Claims submitted and claim admitted are given as under:
A. Financial Creditor:
| S.NO | DETAILS OF STAKEHOLDERS | AMOUNT CLAIMED (IN Rs) | AMOUNT OF CLAIM ADMITTED (IN Rs) | NATURE OF CREDITOR |
|---|---|---|---|---|
| 1 | Dewan Housing Finance Corporation | 1,18,62,152/- | 1,18,62,152/- | Secured Financial Creditor |
| S.NO | DETAILS OF STAKEHOLDERS- OPERATIONAL CREDITORS | AMOUNT RECEIVED (IN Rs) | CLAIMS ADMITTED (IN Rs) |
|---|---|---|---|
| 1 | S P Leather Tech Pvt Ltd | 19,15,440 | 19,15,440 |
| 2 | Magamayee Image | 54,787 | 54,787 |
| 3 | Magamayee Fibre | 3,88,871 | 3,88,871 |
| 4 | Srinala Leathers India Pvt Ltd | 1,21,60,971 | 1,21,60,971 |
| 5 | Hariram Chemicals | 44,24,806 | 44,24,806 |
| 6 | Bhansali Chemicals (Madras Limited) | 3,11,25,068 | 3,11,25,068 |
| 7 | Pavisol Traders | 1,54,087 | 1,54,087 |
| 8 | Nikhi Chemicals | 56,70,949 | 56,70,949 |
| 9 | Tata Chemical Corporation Pvt Ltd | 3,39,16,180 | 3,39,16,180 |
| 10 | Dynamic Marketing | 1,03,42,709 | 1,03,42,709 |
| 11 | KannaChemie Private Limited | 44,14,072 | 44,14,072 |
| 12 | Ranipet Sidco Finished Leather Effluent Treatment Company Limited | 26,38,145 | 26,38,145 |
| 13 | Rasi Enterprises | 3,90,836 | 3,90,836 |
| 14 | Swastika Inc | 55,38,047 | 55,38,047 |
| 15 | TMS Leathers | 84,96,539 | 84,96,539 |
| 16 | Pallave Leathers | 53,70,334 | 53,70,334 |
| 17 | Sunshine Corporation | 77,31,715 | 77,31,715 |
| 18 | A.D.R.K Organization | 14,85,149 | 14,85,149 |
| 19 | Rajeshwari Saw Mill | 12,23,622 | 12,23,622 |
| 20 | Ashraf Leathers | 25,25,442 | 25,25,442 |
| Total | 13,99,67,969 | 13,99,67,969 |
B. Operational Creditors:
| S.NO | DETAILS OF STAKEHOLDERS- OPERATIONAL CREDITORS | AMOUNT RECEIVED (IN Rs) | CLAIMS ADMITTED (IN Rs) |
|---|---|---|---|
| 1 | S P Leather Tech Pvt Ltd | 19,15,440 | 19,15,440 |
| 2 | Magamayee Image | 54,787 | 54,787 |
| 3 | Magamayee Fibre | 3,88,871 | 3,88,871 |
| 4 | Srinala Leathers India Pvt Ltd | 1,21,60,971 | 1,21,60,971 |
| 5 | Hariram Chemicals | 44,24,806 | 44,24,806 |
| 6 | Bhansali Chemicals (Madras Limited) | 3,11,25,068 | 3,11,25,068 |
| 7 | Pavisol Traders | 1,54,087 | 1,54,087 |
| 8 | Nikhi Chemicals | 56,70,949 | 56,70,949 |
| 9 | Tata Chemical Corporation Pvt Ltd | 3,39,16,180 | 3,39,16,180 |
| 10 | Dynamic Marketing | 1,03,42,709 | 1,03,42,709 |
| 11 | KannaChemie Private Limited | 44,14,072 | 44,14,072 |
| 12 | Ranipet Sidco Finished Leather Effluent Treatment Company Limited | 26,38,145 | 26,38,145 |
| 13 | Rasi Enterprises | 3,90,836 | 3,90,836 |
| 14 | Swastika Inc | 55,38,047 | 55,38,047 |
| 15 | TMS Leathers | 84,96,539 | 84,96,539 |
| 16 | Pallave Leathers | 53,70,334 | 53,70,334 |
| 17 | Sunshine Corporation | 77,31,715 | 77,31,715 |
| 18 | A.D.R.K Organization | 14,85,149 | 14,85,149 |
| 19 | Rajeshwari Saw Mill | 12,23,622 | 12,23,622 |
| 20 | Ashraf Leathers | 25,25,442 | 25,25,442 |
| Total | 13,99,67,969 | 13,99,67,969 |
It is stated that the Creditors relinquished their right over the property under Section 52(1)(a) of IBC, 2016. Further, a Bank Account in the name of 'Nag Leathers Pvt Ltd - In liquidation' bearing Account No 506801010033257 was opened on 07.05.2018 with Union Bank of India - Overseas Branch. All the receipts and payments of the Corporate Debtor under liquidation have been routed through this account.
It is stated that assets of the Corporate Debtor comprised of Land & Buildings and Plant and machinery. The liquidation estate under section 36 of the IBC 2016 was formed with all the assets including assets relinquished by the Financial Creditor.
It is stated that the Applicant/ Liquidator as per the mandate of the Code appointed two registered valuers on 08.06.2018 who carried out valuation of the assets of the Corporate Debtor. The average Liquidation value of the assets of the Corporate Debtor is Rs. 7,03,56,000/-.
It is stated that the Applicant/ Liquidator conducted three e-auctions for selling the assets of the Corporate Debtor. The details of the E-auctions conducted by the Applicant are as follows:
| E-Auction No. | Date of E-Auction | Type of Asset | Reserve Price | Date of publish e-auction | Paper Publication effected in |
|---|---|---|---|---|---|
| First E-Auction | 30-08-2018 | Land & Building and Plant and machineries | 7,23,50,000/- | 27-07-2018 | Indian Express - English |
| Land & Building on stand-alone bases | 4,99,00,000/- | Dinamani - Tamil | |||
| Plant & Machinery on stand-alone basis | 2,24,50,000/- | Financial Express - English | |||
| Second E-Auction | 17-10-2018 | Land & Building and Plant and machineries | 6,51,15,000/- | 28.09.2018 | Indian Express - English |
| Land & Building on stand-alone bases | 4,49,10,000/- | Dinamani - Tamil | |||
| Plant & Machinery on stand-alone basis | 2,02,05,000/- | Financial Express - English | |||
| Third E-Auction | 01-12-2018 | Land & Building and Plant and machineries | 6,10,00,000/- | 13-11-2018 | Indian Express - English |
| Land & Building on stand-alone bases | 4,10,00,000/- | Dinamani - Tamil | |||
| Plant & Machinery on stand-alone basis | 1,70,00,000/- |
It is stated that the 3rd e-auction held on 01.12.2018 conducted by the Applicant/Liquidator was successful and M/s. Star Exports emerged as the successful bidder and an amount of Rs. 6,10,00,000/- was realised. The assets of the Corporate Debtor were sold on slump sale basis.
The details of the relevant compliances as mandated under Section 54 of the IBC, 2016 read with the IBBI (Liquidation Process) Regulations, 2016 are listed hereunder:-
| S. No | COMPLIANCE | AVERMENTS | PAGE NO. IN THE APPLICATION |
|---|---|---|---|
| 1 | Regulation 12 | Public Announcement in Form B in Indian Express and Dinamani dated 11.04.2018 | 28-29 |
| 2 | Regulation 35(2) | Appointment of Registered Valuers where no valuation conducted during CIRP | Para 8 of the application & Page No.4 & 41 |
| 3 | Regulation 31(2) | List of Stakeholders within 45 days of the Liquidation Commencement Date | 35-39 |
| 4 | Regulation 31A | Constitution of Stakeholders Consultation Committee (SCC) | N/A |
| 5 | Regulation 13 | Preliminary Report dated 21.06.2018 | 30-39 |
| 6 | Regulation 34 | Preparation of Asset Memorandum within Seventy-Five days from LCD dated 21.06.2018 | 40-44 |
| 7 | Regulation 41 | Opening of Bank Account in the name of the company in Liquidation in "Union Bank of India" | 150-157 |
| 8 | Proof of Closure of the above Bank Account and other account in the name of the Company | N/A | |
| 9 | Regulation 15 | Quarterly Progress Reports and proof of filing the same before this Tribunal | Para 17 of the Application and Page Nos.45 -149 |
| 10 | Regulation 36 | Asset Sale Reports after sale of Reports | 69-70 |
| 11 | Regulation 42(2) | Proof of Distribution within Ninety days from the receipt of realization | 152 |
| 12 | Regulation 45 (3) | Final report dated 01.12.2022 | Page Nos.158 & 164-170 |
| 13 | Regulation 5 (1) (e) | Compilation of Minutes of SCC | N/A |
| 14 | Regulation 15 | Audited Accounts of receipts and Payments | 159-163 |
| 15 | Regulation 37 | Completion of Liquidation Process within one year from Liquidation Commencement Date or extension if any, date of the order & period | N/A |
| 16 | Form-H –Compliance Certificate | Filed as a separate Typeset dated 14.07.2023 vide S.R.No.2937 |
It is stated that the Corporate Debtor did not have any business activities at the time of commencement of liquidation and further there were no employees and the unit remained as a closed unit.
We have heard Ld. Counsel for the Applicant and perused the report and synopsis filed by the Liquidator.
It is stated that no applications are pending before this Tribunal for avoidance of Preferential, Undervalued or Fraudulent Transactions. The Applicant had initially filed IA/1336/IB/2020 under Section 66 of the code. However, the same was dismissed as withdrawn on 20.10.2022.
The liquidator has filed the synopsis showing the realization and the distribution which are reproduced as under:
| 18. REALISATION: | |||||
|---|---|---|---|---|---|
| S. No. | Assets | Mode of Sale | Estimated Liquidation Value (Rs.) | Realisation Amount (Rs.) | Date of Transfer to Liquidation Account |
| (1) | (2) | (3) | (4) | (5) | (6) |
| 1 | Immovable Properties of Factory Land & Building situated at Plot No 48(Part) Survey No 216(Part) Narasingapuram Village, Ranipet, Wallajah Taluk, Vellore - 632 403 along with 18 shops and Plant & Machineries and other Movable Assets | Through e-auction | 7,03,56,000 /- | 6,10,00,000 /- | 03.12.2018 And 31.12.2018 |
19. DISTRIBUTION:
Sl. No. Stakeholders* under section 53 (1) Amount Claimed Amount Admitted Amount Distributed Amount Distributed to the Amo Remarks unt Claimed (%)
(1) (2) (3) (4) (5) (6) (7) 1 (a) CIRP Costs 30,40,623/-* 2 (a) Liquidation Costs 69,20,377/-** 3 (b)(i) Workmen - - - - 4 (b)(ii) Secured Financial Creditor 24,28,61,843 24,28,61,843 5,40,00,000/- 22.23% Union Bank of India 5 (c) wages and any unpaid dues owed to employees 6 (d) Operational Creditor 24,18,16,672 13,99,67,769 - Out of total claim of Rs. 24,18,16,672/- received, defective claims of stakeholders for resubmission amounts to Rs. 10,18,48,903/- 7 (e)(i) Statutory dues - - - - - 8 (e) (ii) Debt owed to secured creditor 1,91,27,826 1,91,27,826 - - The loan is secured by mortgage of personal property by the promoter 9 (f) Remaining dues 1,38,25,000 1,38,25,000 - - - 10 (g) Preference Shareholders - - - - - 11 (h) Equity shareholders - - - - - TOTAL 51,76,31,341 41,57,82,438 6,39,61,000/- Note:
*CIRP Cost include repayment of CIRP cost reimbursed to financial creditor and operational creditor.
** Liquidation cost including TDS and GST paid.
From the averments made in the Application along with the perusal of the final report and the Compliance Certificate filed in Form-H by the Applicant, it is seen that the Corporate Debtor has been completely liquidated. In the circumstances as averred and as prayed for by the Applicant, an order for dissolution is required to be passed by this Tribunal under Section 54 of the IBC, 2016. Accordingly, we hereby order for the dissolution of the Corporate Debtor viz., Nag Leathers Private Limited. The Liquidator is directed to forward the copy of this Order to the RoC concerned and also to the IBBI for its records within a period of 7 days from the date of this Order.
In terms of the above, this IA (IBC) 92/CHE/2023 stands allowed and TCP/73/IB/2017 also stands disposed of.