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Judgment
PER: MS. LAKSHMI GURUNG, MEMBER (JUDICIAL)
The present application has been filed by the Liquidator (“Applicant”) of Mansi International Private Limited (“Corporate Debtor”) under Section 35(1) (m) & (n) of the Insolvency and Bankruptcy Code, 2016 (“Code”) read with Regulation 14 & 45(3)(b) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”) seeking interalia following prayers: -
a. to pass an order for closure of Liquidation Process by winding up/dissolution of M/s. Mansi International Private Limited concerning C.P.(I.B.) No. 1701/2019 since there are no assets/property in the name of the Corporate Debtor that remains to be sold and realized.
b. To relieve the Liquidator from his duties in respect of Corporate Debtor.
We note that, the present application is filed seeking early dissolution of Corporate Debtor without following the process of inviting Expression of Interest in Form G on the ground that there are no assets in the name of the Corporate Debtor.
Commencement of CIRP
Upon an application under Section 7 of the Code filed by Indiabulls Consumer Finance Ltd. (“Financial Creditor”) the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (“CIRP”) vide order dated 11.10.2019 and Ms. Rajshree Padia was appointed as the Interim Resolution Professional (“IRP”).
Subsequently, on a resolution passed by the CoC for change of IRP, Mr. Vijay Pitamber Lulla was appointed as the Resolution Professional (“RP”) vide order dated 13.03.2020 in M.A. 394 of 2020.
In the 7th CoC Meeting conducted on 16.06.2022, the CoC, discussed that there are no assets in the company and there is nothing left in the company and therefore Liquidation seems to be the only option and therefore the company should be wound up. Hence, CoC with 93.22% voting, decided to opt for liquidation of the Corporate Debtor and to appoint the RP as the Liquidator.
Initiation of Liquidation Process
Accordingly, vide order dated 08.08.2022 in I.A. No. 2129 of 2022, this Tribunal passed the order for liquidation of the Corporate Debtor and the RP was appointed as the Liquidator.
Pursuant to Regulation 12 of the Liquidation Regulations, the Liquidator made a Public Announcement dated 18.08.2022 in Form B. The Liquidator received and verified two claims from Financial Creditors i.e., Bank of Maharashtra and Dhani Loans and Services Limited (Formerly known as Indiabulls Consumer Finance Ltd) and two claims were received from Operational Creditors.
The Liquidator received the following claims: -
Sr. No. Name of Amount Amount Date of Creditors claimed Admitted claims Financial Creditors
Bank of 6,35,02,171 6,35,02,171 13.09.2022 Maharashtra
Dhani Loans 58,06,446 58,06,446 01.09.2022 and Services Limited
Operational Creditors
State Tax, 84,57,823 84,57,823 30.03.2022 MUM-VAT-E-610, LTU-4
Assessing 2,22,947 2,22,947 15.09.2022 Authority, Ward-08, Faridabad (South), Excise & Taxation Department, Faridabad
Total 7,79,89,387 7,79,89,387
The Average Fair Value of Assets summed up to Rs.55,21,472 which consisted of cash and cash equivalents and balance with Government Authorities such as GST refund whereas the Average Liquidation Value of Assets summed up to Rs.3,58,823/- which consisted of cash and cash equivalents.
Stakeholders Consultation Committee (“SCC”)
The Liquidator constituted the Stakeholders Consultation Committee (“SCC”) on 30.09.2022 and the 1st SCC Meeting was held on 07.10.20222.
The Liquidator submitted that the Corporate Debtor’s business was non-operational before the CIRP began and there is no movable/immovable asset in the name of the Corporate Debtor. The RP had conducted the valuation of the Securities and Financial Assets during the CIRP where it was found that the Debtors of the Corporate Debtor are not traceable. There is no inventory in the company, Other Current Assets including GST input credit of Rs.52,36,439/- cannot be claimed as a refund but only adjusted against output liability, therefore, the amount is not recoverable as the Corporate Debtor does not have any output liability.
The 2nd SCC meeting was conducted on 02.12.2022 in which the following resolutions were passed: -
“RESOLVED THAT as the company is non operative and there are no assets in the Company which can be realized, hence, it is decided that Liquidator is authorised to file an application to wind up the Company under Regulation 14A of the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulation, 2016 before Hon’ble Tribunal and the liquidator appoint advocate for the same.”
In regards to the above resolution, Bank of Maharashtra gave its assent to file an application to wind up the company under Regulation 14A of the Liquidation Regulations and seek early dissolution vide an e-mail on 26.12.2022. Since their voting percentage was 93.22%, the resolution was considered as passed/approved.
During the 2nd SCC meeting held on 02.12.2022, the Liquidator had put forward the list of unpaid CIRP cost and the estimated liquidation cost. The total cost which was put forth has been reproduced in the following tabular form: -
Sr. No. Particulars Estimated Cost (in Rs.)
Unpaid CIRP Cost 2,11,618
Estimated Liquidation Cost 2,40,000
Total 4,51,618
Thereafter, the following resolution was put for e-voting: -
“RESOLVED THAT the unpaid CIRP cost and the estimated liquidation cost aggregating to Rs.4,51,618 including the liquidator’s fees are hereby approved and that the same be borne by the Financial Creditors in their claim ratio as there are no recoveries possible.”
Similarly, Bank of Maharashtra gave its assent to the above resolution via e-mail on 26.12.2022. Since their voting percentage was 93.22%, the resolution was considered as passed/approved.
The CIRP Cost and Liquidation Cost was borne by the Financial Creditors.
The Liquidator filed Quarterly Progress Report-I dated 15.10.2022 and Quarterly Progress Report-II dated 13.01.2023 which was taken on record by this Tribunal vide order dated 19.01.2023.
The Applicant submitted that no legal proceedings are pending against the Corporate Debtor and no applications have been pending with regards to ‘Avoidance of Transactions’ before this Tribunal.
Pursuant to the compliance of Regulation 45 of the Liquidation Regulations, the Applicant has annexed the Compliance Certificate in Form-H which is undated. However, in view of the supporting affidavit dated 08.03.2023, we treat the date of Form H as 08.03.2023.
The Applicant intimated the GST/VAT Department on 02.01.2023 and the Income Tax Department on 27.01.2023.
The Applicant annexed the Bank Closure Letter dated 22.02.2023 issued by the IndusInd Bank Limited wherein it was certified by the bank that the account maintained by M/s. Mansi International Private Limited bearing account no. 2010001466035 with their Opera House Branch since 24.07.2017 was closed on 20.02.2023.
During hearing of this application on 11.10.2023, query was raised which is captured in the daily order dated 11.10.2023 and reproduced below: -
“2.This is an application filed by the Liquidator for dissolution of the Corporate Debtor. However, we find that no balance sheet is enclosed about the state of affairs of the Company showing nil assets and nil liability.
3.Ld. Counsel appearing for the liquidator undertakes to file balance sheet of the Company before dissolution and the status of the liability of the company.”
In compliance with the Daily Order dated 11.10.2023, the Liquidator filed an Additional Affidavit on 23.12.2023 and placed on record the Financial Statement of the Corporate Debtor as on 07.08.2022 along with the Audit Reports.
The Liquidator had annexed the Final Report at ‘Annexure H’ on Page No. 41 of the Petition, in which the Audited Receipts and Payments dated 01.03.2023 show that, an Opening Balance of Rs. 5,042/- was available with the Liquidator in the Mansi International Private Limited (In Liquidation) Account maintained at IndusInd Bank. The Liquidator received an amount of Rs.3,14,177/- as the Outstanding CIRP/Liquidation Cost. The entire amount was paid towards the ‘Outstanding CIRP/Liquidation Cost’, ‘Liquidation expenses & fees’, ‘E-voting Charges’, ‘LA & Associates’, etc. by the Liquidator and the Closing Balance as on 31.01.2023 was Rs.0.
Herd Ld. Counsel for the Applicant and having gone through the facts and circumstances of the case, we observe that there are no assets left with the Corporate Debtor. As there are no assets/property in the name of the Corporate Debtor which are to be sold and realized, no distribution is possible and the liabilities of the corporate debtor stand settled in view of Section 53 of the Code.
Accordingly, the above application is allowed permitting early dissolution of the Corporate Debtor under Regulation 14 read with Regulation 45(3)(b) of the Liquidation Regulations and is ordered as follows: -
ORDER
We hereby order for the dissolution of the Corporate Debtor i.e. Mansi International Private Limited with the following directions:
The Corporate Debtor stands dissolved from the date of this order.
The Liquidator, Mr. Vijay Pitamber Lulla is discharged from his duties and responsibilities as the Liquidator of the Corporate Debtor.
The Liquidator and the Registry are directed to forward a copy of this Order to the concerned authorities and the Registrar of Companies having jurisdiction and also to the Insolvency and Bankruptcy Board of India, within 7 days from the date of uploading of this order, for further necessary action as prescribed under law.
As a result, I.A. No. 947 of 2023 is hereby allowed and disposed of and CP(IB)/1701/MB/C-III/2019 is hereby closed.
‘Files be consigned to records’