M/s Baddi Foils Private Limited vs M/s Biotropics Pharma Private Limited

IA (IBC) (Dis.)/12(PB)/2024 is an application for dissolution of Corporate Debtor M/s Biotropics Pharma Private Limited, filed by the Liquidator under Section 54(1) of the Insolvency and Bankruptcy Code, 2016 (IBC / Code) Applicant has prayed for the following:

Brief Facts of the case are as follows:

This Adjudicating Authority vide order dated 09.04.2018 (Admission Order) admitted the petition being CP(IB)-239-(PB)/2017 filed by M/s Baddi Foils Private Limited.

Liquidator submits that at the time of commencement of CIRP, CD was having its two industrial units located at Plot No. 76/2 , DIC Industrial Area, Baddi, Distt. Solan, H.P. PIN173205 and also one unit at Plot No.-17 & 18, Apparel Park-cum-Industrial Area, Katha, Bhattolikalan, Baddi, Distt. Solan, H.P.-173205 and all the three units were found to be non-functional and these were reported to be non-operational since financial year 2015-16. Liquidator also submitted that at the time of commencement of CIRP, the Corporate Debtor had: - I. No employees, - II. No business activity, - III. Tangible assets included Land & Building and Plant & Machinery, which were sold and distributed in terms of section 53 of IBC excluding disputed assets. IV. There was no stock/inventory of raw-material, work-in-process etc. Only some garbage containing torn papers and dried Ink containers were lying scattered in the factory, which did not have even scrap value. Further, no financial records have been maintained by the CD after 31.03.2015. As per the audited balance sheet as on 31.03.2015, total revenue was reported at Rs. 16,29,08,827/- and Profit before tax was Loss at Rs. 5,59,91,219/-. Inventory was shown as Rs. 9,89,22,137/- and receivables at Rs. 6, 18,56,639/- and Short-term loan and advances at Rs. 1,22, 15,875/-. Erstwhile directors and statutory auditors had not provided account books/ documents and accounting software etc. to the RP /Liquidator despite repeated requests. The total revenue shown for the financial year 2015-16 in provisional balance-sheet was Rs. 3,97,03,652/- and total loss was shown as Rs. 11,17,42,000/-, Inventories were shown of Rs. 3,50,000/- and receivables at Rs. 1,71,70,848/-.

Despite making efforts twice by RP, no resolution applicant came forward to submit a resolution plan. Accordingly, CoC in its 4th meeting held on 14.09.2018 recommended for liquidation of the corporate debtor and appointed Mr. Naresh Kumar Sood as its Liquidator.

Vide order dated 26.10.2018, this Adjudicating Authority allowed Liquidation Application being CA-978/2018 filed under section 33(1) of the Code and Mr. Naresh Kumar Sood was appointed as the Liquidator.

Liquidator made public announcement in prescribed Form B dated 30.10.2018 as per Regulation 12 of Liquidation Process Regulations inviting claims from all stakeholders with proof of claim. Summary of claims of all the stakeholders are given hereunder:

Pursuant to Regulation 15 of the Liquidation Regulation, total 21 progress reports were filed for every quarter post commencement of Liquidation.

Liquidator has submitted that the Corporate Debtor's units were located at two locations. Similarly, Plant & Machinery installed at three units had different utilities. Hence, liquidator had decided to sell the assets in five Blocks. Unit number 1 & 2 located at same location at 76/2, DIC Industrial Area, Baddi was categorized as Block A, whereas unit located at 17-18, APCIA, Bhatolikalan, Baddi was categorised as Block-B. Similarly, Plant and Machinery located in Unit No. 1 was categorised as Block-C, at unit no. 2 as Block-D and at Unit No. 3 as Block-E. Block wise assets and Reserve Price for e-auction has been annexed as Annexure 10 @ page 183-184 of this application. Liquidator had conducted the process of e-auction and successfully sold movable assets of the company in parcels vide e-auction held on 28.03.2019. E-auction for plant and Machinery i.e. Block C, D and E was successful on 28.03.2019. The buyer was issued Certificate of Sale on 03.05.2019. As e-auction for Block- A & Block- B was not successful, Liquidator has resorted to Private Sale Mode. Block A was sold for Rs. 61,00,000/- and Block B for 1,26,97,000/-. The sale letters were issued on 11.09.2019 and 11.10.2019 respectively.

Liquidator had, in all, received eight (8) claims, out of which, one was received from operational creditor other than State and Central Government departments, five (5) were received from Government departments, out of which one was from EPFO relating to employees' dues and a claim from ESIC was regarding some penalties for delayed filing of returns etc. and two from financial creditors. Claims of financial creditors were secured and operational creditors were unsecured. There were outstanding CIRP expenses also. One of the secured financial creditors, Bank of India had registered charge on CD's entire Land & Building and Plant & Machinery whereas Reliance Commercial Finance Limited had registered their charge on specific machines financed by them. Liquidator had realised the sale proceeds of Liquidation Estate, which were under his control and distributed under section 53 of IBC. Provident Fund dues and CIRP expenses were distributed first. Distribution proceeds as given in annexure 16 is extracted below:

Pursuant to Regulation 41 of the Liquidation Regulations, the Liquidator opened a bank account with Bank of India in the name of Corporate Debtor i.e. “Biotropics Pharma Pvt. Ltd.’ - in Liquidation” having Account number 791720110000428. The account has been closed on 22.02.2024 and funds disbursed to creditors. 2.10 In pursuance of Regulation 45 of the Liquidation Regulations, the Liquidator filed Final Report vide IA No. 1356(PB)/2024 with this Adjudicating Authority on 19.03.2024 which was taken on record. 2.11 Compliance Certificate in Form H has been annexed with this Application for closure of Liquidation Proceedings as Annexure – 23. 2.12 Liquidator submitted that no PUFE transactions were found as per Provisional financial statement for two preceding years from CIRP date. Ex-directors also reported that original record has been stolen and an Affidavit (Annexure-5 (colly)) has been filed by them with this AA regarding this fact. Liquidator further submits that there is no litigation/ PUFE Transaction Application pending against the CD before NCLT or any court of law as per the information available with the Liquidator. 2.13 Liquidator had explored the possibility of assignment of disputed assets (case property which was in respect of an FIR filed by one erstwhile Director for goods stolen from the factory premises on 29.12.2017) as per Regulation 37 A of Liquidation Regulations 2016. To take forward this process, Liquidator had constituted a Stakeholders Consultation Committee (SCC) in terms of Regulation 31A of Liquidation Regulations, 2016. The Liquidator had, during the SCC Meeting informed that he had appointed two registered valuers, for valuation of disputed assets. It was valued at Rs. 19.43 lakhs and in 2nd SCC meeting dated 14.10.2021 Liquidator requested the Committee to consider invoking Regulation 37A regarding assignment of disputed assets. Consequently, Liquidator initiated the process of e-auction of the disputed assets for assignment. Liquidator had informed the committee in 3rd SCC meeting held on 26.11.21 that he had initiated the process of e-auction of the disputed assets for assignment under Regulation 37 A. An average of realization value of both the valuations was fixed as 'Reserve Price' for bidding. Public notices for assignment (sale) were issued in two newspapers. He informed the committee that despite many prospective investors showing interest in assets, no bid was received. Further, the Liquidator identified some current assets based on provisional balance sheets provided by ex-Directors as on 31.03.16, 31.03.17 and 31.03.18. The Liquidator invited offers by public advertisement for assignment of these assets as Not Readily Realisable Assets (NRRA) under Regulation 37A of Liquidation Regulations. However, he did not receive any offer. Liquidator further submitted that the unsold assets have been distributed/assigned to creditors as per Regulation 38(1) of Liquidation Regulations. Liquidator has assigned the unsold assets to the creditors on 15.02.2024 in terms of Hon'ble NCLT order dated 2.01.2024.

File be consigned to Record Room (Final).