In Re: M/s. Perfect International Fabricators Private Limited (Liquidation Extension)

Per: R. SUCHARITHA, MEMBER (JUDICIAL)

Under adjudication is an application filed by the Liquidator of M/s. Perfect International Fabricators Private Limited pursuant to Regulation 44 (2) of Insolvency and Bankruptcy Board of India (Liquidation Process Regulations, 2016 seeking for an extension of time period of Liquidation by 8 months with effect from 13.12.2020.

The learned counsel for the Applicant submitted that the Liquidation Process of the Corporate Debtor was commenced vide order of this Tribunal on 13.12.2019. The CIRP was initiated by one of the Operational Creditors (M/s. Jotun India Private Limited – IBA/330/2019) of the Corporate Debtor. The Applicant received claims in pursuance of the public announcement and proceeded to constitute 1st CoC meeting on 04.06.2019 wherein the applicant was appointed as RP. The RP issued paper advertisement for inviting Expression of Interst in Form-G in English Newspaper “Times of India” and in Tamil newspaper “Daily Thanthi” on 31.07.2019. However, there was no expression of interest received from the prospective Resolution Applicants. At the 3rd CoC meeting held on 21.10.2019 and 22.10.2019, the members had decided to proceed with the liquidation of the Corporate Debtor.

According to the Liquidator, intimation was sent to relevant persons and relevant statutory authorities about the commencement of liquidation and e-form INC 28 has been filed with RoC, Chennai. The Liquidation Bank Account of the Company was opened on 24.01.2020. The Applicant had issued public announcement calling for Claims in Form-B on 23.12.2019 in one English newspaper “The New Indian Express” and in one vernacular language (Tamil) “Dinamani” having wide circulation in Trichy where registered office of the Corporate Debtor is located. The last date for submission of claims was on 17.01.2020. The total status of Claims Admitted in Liquidation is as under:

The Applicant has received claims from various creditors of the Corporate Debtor and the same was submitted to this Tribunal on 03.03.2020 along with preliminary report and asset memorandum. Further, four quarterly progress reports were also filed. The Applicant has appointed M/s.GBSV Associates, Chartered Accountants, Chennai in the place of existing Statutory Auditors Mr. Kalyan of SKR & Co. LLP, Trichy on 09.07.2020 to complete the audit till the date of liquidation. The Applicant states that inspite of repeated requests to complete the audit of financial statement for the year 2018-2019 the erstwhile auditors was unable to close the same and hence the Liquidator had to change the Statutory Auditors. The Applicant has been following up on the assets of the Company.

According to the Applicant, three Avoidance Applications have been filed as under:

The Liquidator had presented a budget for an amount of Rs.24.30 lakhs for liquidation in the 3rd CoC meeting held on 21.10.2019 and subsequently enhanced by Rs.10 lakh and communicated to the stakeholders in connection with the discussions of sharing of costs by secured creditors who have relinquished their security interest. The main pay-outs during liquidation are Rs.36,000/- per month paid to 4 security staff and Rs.54,000/- to the ex-employees of the Company including one Accountant and electricity charges of about Rs.30,000/- payable on a bi-monthly basis. The Average Liquidation Value of the total assets of the Corporate Debtor as per the Registered Valuer Report obtained during CIRP period are given under:

The Financial Creditor Claims of Rs.14.20 crore, there are 2 financial creditors of the company who have submitted claims in Form C of the Liquidation Process Regulations under the Code (i) M/s. State Bank of India (Claim of Rs.11.05 Crore); and (ii) Ms/ SREI Equipment Finance Limited (Claim of Rs.3.14. Crore). M/s. SBI have relinquished their security interest in favour of the liquidation estate while M/s. SREI have opted to realize their security interest which includes land of 6.35 crore at MR Palayam, Sanamangalam Village, Manachanallur Taluk, Tiruchirapalli-621104 and certain items of plant and machinery (invoice value Rs.5.12 crore as per Hypothecation Deed) which needed to be segregated from the total list of plant and machinery of the company to enable the liquidator to proceed with the sale of the balance assets. As decided in the stakeholders meeting held on 04.09.2020, two independent Valuers were appointed by the secured Financial Creditors for the segregation of assets and physical verification activity was commenced on 21.10.2020 and in the first week of November 2020. The final report on this matter is yet to be provided to the Applicant. However, in the additional typed-set of documents filed on 05.03.2021, the Applicant has furnished as follows

The Applicant states that the liquidation process relating to sale of assets could not be proceeded mainly due to the COVID-19 lock down and assets of the company yet to be segregated. Details of extension sought have been placed at the Stakeholders Consultation Committee meeting held on 10.12.2020 and approval obtained. As per Regulation 47A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, the applicant seeks extension of liquidation period by 263 days from 24.03.2020 to 12.12.2020 for completing the liquidation process and for dissolution of the Company and such extension of time may be granted from 13.12.2020 (conclusion of one year from the date of commencement of Liquidation i.e. 13.12.2019).

Upon perusal of documents, the relief sought for extension of period of 263 days from 24.03.2020 to 12.12.2020 for completing the Liquidation process from 13.12.2020 for completion of sale of assets of the Corporate Debtor and for dissolution of the Company is granted.

Accordingly, this application IA/07/2021 stands allowed with the aforesaid terms.