Canara Bank vs Lare FIBC And Energies Private Limited

The Present application has been filed under Section 33 & 34 of the Insolvency & Bankruptcy code, 2016 (herein after termed as “the Code”) by Mr. Ramachandran Subramanian, RP of Lare FIBC and Energies Private Limited, i.e. the Corporate Debtor (hereinafter referred as “CD”) seeking following reliefs hereby:

The corporate debtor, was admitted to Corporate Insolvency Resolution Process, (hereinafter referred as “CIRP”) vide an order dated 23.11.2023 passed by this Adjudicating Authority and one Mr. Muthuiah Thevar Rajapandian, was appointed as the Interim Resolution Professional of the CD.

Subsequently, vide order dated 04.01.2024 of this Tribunal in IA(IBC)/2304(CHE)/2023, the present applicant Mr. Ramachandran Subramanian, having Registration No. IBBI/IPA-001/IP/P-01440/2018-19/12136 has been appointed as RP, to perform the duties in respect of Mr. Muthuiah Thevar Rajapandian on considering the memo filed on 18.12.2023.

It is stated that, the applicant RP has received claims from creditors, namely Canara Bank, Director General of Foreign Trade and ESI Department, which after verification based on proof, admitted the claims as follows,

It is stated that, RP vide emails dated 07.02.2024 & 29.02.2024, requested the suspended directors to share the accounting software details, Tally/SAP data of Corporate Debtor. As there was no support or co-operation from the suspended directors, the RP was forced to file separate proceeding for rendering due co-operation vide IA(IBC)/826(CHE)/2024 under Section 19(2) of the IBC, 2016.

It is notified that the CD did not file the financial statements and annual returns for almost 5 years since 31.03.2019.

It is stated that, the Invitation through Form G for Expression of Interest (EoI) for submission of a Resolution Plan in respect of the CD was published on 29.03.2024 along with necessary RFRP and Evaluation Matrix being shared with the Participants, where Rs.25 Lakhs was fixed as minimum upfront amount from the applicants for the purpose of financial commitment.

It is stated that, during the 7^th CoC meeting, the future course of action was discussed regarding the CIRP of the CD, since there was no receipt of any resolution plan. It is discussed that, there were 12 applicants who were expressing interest at a point and none got materialized as there were no financial commitment or any advance payment from the applicants.

It is stated that, the Auditor who agreed to perform the transactional audit work withdrawn from the same, as there were no records to verify SAP/Tally data. Non Cooperation of the erstwhile management in sharing the arear data, made the resolution process unviable.

It is stated that, based on the suggestion of one Mr. Manvendra, Senior Manager, Law, extension of the CIRP for exploring opportunities and conduct EoI second time. The 90 days extension period of CIRP was sought vide IA(IBC)/1572(CHE)/2024 and order extending the CIRP was passed on 25.07.2024 with effect from 18.07.2024.

It is stated that, during the 2^nd round of resolution, the Form G was published on 11.08.2024 and the Prospective Resolution Applicants were supposed to submit Resolution Plan on or before 20.09.2024. PRA's namely, Finextragrowth, Amit Gupta, Client help, Bodugu Sudhakar & Praveen Bansal submitted their EoI, pursuant to which the applicant RP shared the Information Memorandum, Evaluation Matrix and RFRP.

It is stated that, even during the 2^nd round of resolution, none get materialized and the EoI process went in vain. The extended timeline granted was also about to expiry which made it imperative to push the CD into Liquidation as there was no Resolution Plan.

It is stated that the RP has appointed the registered valuers for valuing the Land and Building separately, while valuing the Plant & Machineries separately. The Valuation of the CD is given as follows,

It is submitted that, during the 10^th CoC meeting dated 27.09.2024, the sole CoC member Canara Bank resolved to liquidate the CD due to Non-Receipt of any Resolution Plan and passed the same. The extracts of the resolutions from the minutes of 10^th CoC is as follows,

It is also submitted that the CoC by resolution, in the same 10^th CoC meeting has recommended the existing RP, Mr. Ramachandran Subramanian having IBBI Registration No. IBBI/IPA-001/IP/P-01440/2018-2019/12136 for appointment as Liquidator in respect of the CD herein and thus the applicant RP has sought for Proposed Insolvency Professional to be appointed as Liquidator as per the code.

Heard the Ld. Counsel appeared on behalf of the applicant and perused the records.

From the Compliance certificate (Form H) attached with the application the dates and events subsequent to initiation of CIRP of the CD is as follows,

It is observed that since the maximum period of 270 days in respect of CIRP is extinguished and as there is no viable resolution plan received, the CoC decided to liquidate the CD. Therefore the resolution for Liquidation of the Corporate Debtor has been passed taking into consideration, the interest of the Corporate Debtor and all other stakeholders concerned. Thus CoC directed the Resolution professional to file application for Liquidation of the Corporate Debtor.

It is seen that the Applicant/RP submitted FORM-H dated 14.10.2024 as per Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. The same is placed at Page 56 - 63 of the application. As observed from Form-H, there is no PUFE applications pending in respect of the CD.

Further, after verifying the disciplinary status from the IBBI portal, we appoint Mr. Ramachandran Subramanian having Reg. No. IBBI/IPA-001/IP/P-01440/2018-2019/12136, email id: [email protected], Contact No. 9025120271 with valid AFA till 30.06.2025 as the Liquidator for the Corporate Debtor.

From the above facts and circumstances, considering the decision taken by the CoC of the Corporate Debtor, this Adjudicating Authority deems it fit to order Liquidation of the Corporate Debtor. Accordingly, we order Liquidation of the Corporate Debtor i.e. Lare FIBC & Energies Private Limited by appointing the above Mr. Ramachandran Subramanian as the Liquidator to carry out the liquidation process subject to the following terms/directions: -

a. The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and Regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended up to date enjoined upon him.

b. The Liquidator shall issue the public announcement that the Corporate Debtor is in liquidation. In relation to officers/ employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge.

c. The Liquidator shall investigate the financial affairs of the Corporate Debtor particularly, in relation to preferential transactions/ undervalued transactions and such other like transactions including fraudulent preferences and file a suitable application before this Adjudicating Authority.

d. The Registry is directed to communicate this order to the Registrar of Companies, Chennai and the Insolvency and Bankruptcy Board of India;

e. In terms of section 178 of the Income Tax Act, 1961, the Liquidator shall give necessary intimation to the Income Tax Department. In relation to other fiscal and regulatory authorities which govern the Corporate Debtor, the Liquidator shall also duly intimate about the order of liquidation.

f. The order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence.

g. The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016.

h. The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section – 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company Applications during the process of liquidation.

j. Copy of this order be sent to the financial creditors, Corporate Debtor and the Liquidator for taking necessary steps and for extending the necessary cooperation in relation to the Liquidation process of the Corporate Debtor.

With the above directions, IA(IBC)(LIQ)/ 37(CHE)/ 2024 in CP(IB)/ 120(CHE)/ 2023 stands allowed and disposed of.