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Judgment
Per: Sh. Charanjeet Singh Gulati, Member (Technical)
The present Application has been filed under Section 33(1)(a) r.w. 60(5) of the Insolvency and Bankruptcy Code, 2016 by Ms. Prajakta Menezes seeking the following reliefs: -
“a. Pass an order directing the initiation of Liquidation of the Corporate Debtor in accordance with Chapter III of Part II of the IBC, 2016.
b. Appoint Mr. Hasti Mal Kachhara, having IBBI Regn No. IBBI/IPA-002/IP-N00342/2017-2018/10992 as the Liquidator of the Corporate Debtor in accordance with Section 34 of the Code.
c. Pass ad-interim and Interim reliefs in terms of Clause (a) to (b);
d. Pass any other order that this Hon’ble Adjudicating Authority may deem fit in the facts and circumstances of the case.”
Brief Facts
The Financial Creditor, Centbank Financial Services Limited filed the Company Petition No. (IB)419/MB/C-III/2023 before this Tribunal as per Section 7 of the Insolvency and Bankruptcy Code, 2016 (“the Code”), to initiate Corporate Insolvency Resolution Process (“the CIRP”) against the Corporate Debtor, M/s. Taquito Lease Operators Limited. Vide the Tribunal order dated 10.11.2023, the CIRP was commenced and Ms. Prajakta Menezes was appointed as the Interim Resolution Process (“IRP”).
The IRP made a Public Announcement in FORM B as per section 13 of the Code, read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) on 12.11.2023 in the Free Press Journal (English) and Navshakti (Marathi), inviting claims from the Creditors of the Corporate Debtor. Pursuant to the publication, the IRP received only one claim from a Financial Creditor i.e., Centbank Financial Services Limited and a claim from Operational Creditor whereas no claims of Statutory Dues, Workmen or Employee dues were received.
The 1st Committee of Creditors (CoC) Meeting was convened on 08.12.2023 which consisted of only one Financial Creditor. With a 100% voting share, the CoC appointed Ms. Prajakta Menezes as the Resolution Professional (RP). In this meeting, the Chairperson, Ms. Prajakta Menezes presented the below list of Creditors and the Composition of CoC: -
Summary of Claims
| Particulars | No. of Claims | Amount Claimed | Amount Admitted |
|---|---|---|---|
| Financial Creditors (A) | 1 | 337,72,64,800 | 337,72,64,800 |
| Operational Creditors (B) | 1 | 6,60,800 | 6,60,800 |
| Workers/Employees (C) | 0 | - | - |
| Statutory Authorities (D) | 0 | - | - |
| Total Operational Creditors (B+C+D) | 0 | - | - |
| Total Claims | 2 | 337,79,25,600 | 337,79,25,600 |
Composition of CoC:
| Name of Financial Creditor | Security Interest | Amount Claimed | Amount Admitted | Voting % |
|---|---|---|---|---|
| Centbank Financial Services Limited | Secured | 337,72,64,800 | 337,72,64,800 | 100 |
The 2nd CoC Meeting was held on 03.01.2024, where the CoC approved the publication of FORM G for the invitation of Expression of Interest (EoI) from Prospective Resolution Applicants (PRA's). The RP published the FORM G on 08.01.2024 in "The Fress Press Journal" and "Navshakti" of Mumbai Edition.
The RP informed the CoC members that the last date of submission of EoI was 07.02.2024. Vide an email dated 12.02.2024 the CoC members approved to extend the last date of submission of EoI by further 14 days which is until 21.02.2024, pursuant to which a Revised FORM G was published on 14.02.2024 in "The Fress Press Journal" (English) and "Navshakti" (Hindi) of Mumbai Edition. The 3rd CoC Meeting was held on 23.02.2024 where the RP informed the CoC members that 3 EoI's were received from the PRA's namely Navneet Garg, Real Value Infotech Projects Private Limited and a Consortium of M/s. NRG & Co., Mr. Vinit Gupta & Mr. Vikram Tuli.
In the 4th CoC Meeting held on 23.04.2024, the RP informed the CoC members, that the PRA's are inclined towards Real Estate lease assets. After discussing with the RP, the PRA's realised that the Corporate Debtor's assets were not Real Estate lease assets and therefore the PRA's did not submit any Resolution Plan. As no Resolution Plan had been received, the Chairperson of the CoC apprised the members that they can consider the following options for the way forward in the CIRP:
a) Reduce the eligibility criteria to encourage more interested bidder to submit a plan. b) Consider Liquidation of the Corporate Debtor, given that the last date of the CIRP is 08.05.2024.
Furthermore, in 4th CoC Meeting, the CoC members discussed that there is no visibility on the assets of the Company and the process for invitation of resolution plans has failed. The members informed the RP that they would discuss this matter with their higher authority and shall inform the RP about the outcome.
In The 5th CoC Meeting held on 04.05.2024, the agenda of Liquidating the Corporate Debtor was put before the CoC, which was approved with 100% Voting to proceed with the Liquidation of the Corporate Debtor. The Chairperson of the CoC informed the members that, since there are no liquid assets available with the company, therefore, the entire Liquidation Cost has to be contributed by the Financial Creditors in the ration of their voting share. The Chairperson further stated that the liquidator's fees shall be subject to negotiation between the proposed liquidator and the members. The Chairperson thereafter presented the estimated liquidation costs before the CoC members in the following tabular form: -
| Particulars | Amount (Rs.) |
|---|---|
| Legal Fees (Avoidance application, Constitution of SCC, Progress Report and Dissolution/Liquidation Closure Application etc) | 4,50,000 |
| Public Announcement and Auction Notices | 1,50,000 |
| Miscellaneous Expense | 1,00,000 |
| Estimated Liquidation Cost (a) | 7,00,000 |
| Estimated Liquid Assets (b) | |
| Cash/Bank Balance | Nil |
| Contribution by Financial Creditors (a-b) | 7,00,000 |
Thereafter, in the 5th CoC Meeting, following resolution was passed:
“RESOLVED THAT, the consent of the members of Committee of Creditors be and is hereby accorded for Liquidation of the Corporate Debtor under Section 33 of the Insolvency and Bankruptcy Code, 2016.”
“RESOLVED THAT, pursuant to regulation 39B of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, consent of the members of the Committee of Creditors be and is hereby accorded to approve the plan providing for contribution for meeting the differential expended between the estimated value of liquid assets and estimated liquidation cost in the event an order of liquidation is passed under section 33 of the Code and such amount shall be contributed by the members in proportion to their respective voting share in the Committee of Creditors.”
With the consent of the members, in the 5th CoC meeting, the CIRP cost of Rs. 14,25,252 incurred until 02.05.2024 was also ‘approved’ by 100% voting share.
| Sr. No. | Particulars | Amount INR |
|---|---|---|
| 1. | IRP Fee (10-11-2023 to 15-12-2023) | 2,36,000 |
| 2. | RP Fee (16-12-2023 to 02-05-2024) | 10,85,600 |
| 3. | Public Announcement Cost – Form A | 21,546 |
| 4. | Public Announcement – Form G | 20,072 |
| 5. | Public Announcement – Form G (extension) | 18,734 |
| 6. | Legal Fees – Adv. Rakesh Gupta | 25,000 |
| 7. | Voting platform – Right 2 Vote Platform | 17,700 |
| 8. | MCA compliance | 600 |
| Total | 14,25,252 | |
The resolution for appointment of Mr. Hasti Mal Kachhara as the Liquidator of the Corporate Debtor was never put for e-voting, but the sole CoC Member provided his consent in FORM AA and requested for his appointment as the Liquidator of the Corporate Debtor vide email dated 24.06.2024. Therefore, the CoC proposed for appointment of Mr. Hasti Mal Kachhara, having IBBI Regn. No. IBBI/IPA-002/IP-N00342/2017-2018/10992 as the Liquidator of the Corporate Debtor.
In view of the above matter, after considering the submissions and on perusing the averments made in the present application, this Bench is satisfied and is of the considered opinion that the present application is in consonance with Section 33(2) of the Code. Therefore, under these circumstances, since the CoC had decided to proceed with the liquidation of the Corporate Debtor as no Resolution Plan was received by the CoC and that they do not foresee any possibility of receiving plans for the Corporate Debtor, we find it a fit case for liquidation of the company, and pass the following directions: -
a. The Corporate Debtor is directed to be liquidated in accordance with the provisions of the IBC and applicable regulations.
b. We note that the written consent of the Insolvency Professional along with Authorization for Assignment has been annexed to the present application. Therefore, in accordance with Section 34(4)(c) of the Code, we hereby appoint Mr. Hasti Mal Kachhara bearing Registration No. IBBI/IPA-002/IP-N00342/2017-2018/10992 and having address at; A-602, Nirman Apartments, Pump House, Vikas Nagar, Andheri (East), Mumbai City, Maharashtra - 400093 as the Liquidator. His Authorization for Assignment is valid up to 12.12.2024.
c. The fees entitled to the Liquidator shall be subject to negotiations between the proposed liquidator and the members of CoC OR the fees entitled to the Liquidator shall be as per Regulation 4(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, whichever is higher.
d. Registry is directed to send a copy of the order to the Registrar of Companies, Mumbai and the Insolvency and Bankruptcy Board of India.
e. A fresh moratorium shall commence under Section 33(5) of the Insolvency and Bankruptcy Code.
f. This order shall be deemed to be a notice of discharge to the officers, employees and the workmen of the Corporate Debtor as per Section 33(7) of the IBC Code, 2016.
g. The Liquidator is directed to proceed with the process of liquidation as laid down under Chapter III of the Part II of Insolvency and Bankruptcy Code, 2016 and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
h. The Liquidator shall submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) regulations, 2016.
The Liquidator appointed under section 34 of the Code shall have all the powers of the Board of Directors, Key Managerial Personnel and the existing Board of the Corporate Debtor, the Key Managerial Persons and the partners shall cease to have effect.
j. The personnel of the corporate debtor shall extend all co-operation to the Liquidator as required by him in managing the Liquidation process of the Corporate Debtor.
k. A copy of the said order shall be sent to the Financial Creditors, Corporate Debtors and the Liquidator for taking necessary steps.
The I.A. No. 78 of 2024 in C.P. No. 419 of 2023 stands disposed of.