M/s. Steel Exchange India Limited vs M/s. Sai Bhaskar Irons Limited

Per : Bench

This an Application filed by the Resolution Professional under Section 33(1), 33(2) and 34(1) read with Section 60(5) of the Insolvency and Bankruptcy Code 2016, seeking Orders for Liquidation of the Corporate Debtor (CD) i.e. M/S. SAI BHASKAR IRONS LIMITED; and for appointing the Applicant as the Liquidator.

The Company Petition i.e., CP (IB)/252/9/HDB/2021 was admitted in to CIRP^{11.Corporate Insolvency Resolution Process.} by this Tribunal vide Order^{22.Pg 15-28 of the Application.} dated 24.04.2023 and the Applicant herein, was appointed as Interim Resolution Professional (IRP).

On May 4, 2023, the Applicant issued a public announcement^{33.Pg 29-30 of the Application.} in Form A through newspapers, officially declaring the commencement of the Corporate Insolvency Resolution Process (CIRP) and inviting claims from creditors of the Corporate Debtor (CD). In response to this announcement, the Applicant received claims from various creditors of the CD. Subsequently, these claims were compiled, and a comprehensive list of creditors was formulated in accordance with the provisions of the Insolvency and Bankruptcy Code. Following this, the IRP established the Committee of Creditors (CoC), comprising Operational Creditors, and submitted a report certifying the constitution of the CoC to this Tribunal, adhering to the stipulations outlined in Regulation 17 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016.

In the 1st CoC meeting^{44.Pg 39-49 of the Application.} held on 02.06.2023, the Applicant IRP was appointed as Resolution Professional (RP) and the same was approved by this Tribunal vide Order^{55.Pg 51 of the Application.} dated 19.06.2023. In accordance with the approval of CoC in its 2nd meeting held on 29.06.2023, the Applicant issued Public Notice in Form G6 calling for Expression of Interest (EoI) from Prospective Resolution Applicants (PRAs). In view of the poor response by the last date of submission of EoIs, the CoC in its 3rd meeting7 held on 04.08.2023 directed the Applicant to issue one more Form G.

The CoC in its 4th meeting8 held on 05.09.2023, had considered and approved the Request For Resolution Plan (RFRP) and draft Evaluation Matrix.

In its 5th meeting9 held on 12.10.2023, the CoC had approved the appointment of Statutory Auditors. It is further submitted that, during 7th CoC meeting10 held on 27.11.2023 discussed on the status of Resolution Plan received, the deficiencies noted therein, and deliberated with the PRA on the deficiencies/shortfalls noticed in the Plan submitted by it and requested the PRA to improve its offer and submit a fully compliant Resolution Plan for the consideration of CoC. Further, the CoC had taken on record the Report of the Transaction Auditors.

It is further submitted that, CoC in its 9th meeting11 held on 18.01.2024 members present opined that, there is no point in approving the deviations/deficiencies in the Resolution Plan pointed out by the RP, which serves no purpose in pursuing a reluctant Resolution Applicant. Further noting that, the Plan amount proposed was also too low, the CoC had, in exercise of

6 Pg 63-64 of the Application.

7 Pg 65-75 of the Application.

8 Pg 76-81 of the Application.

9 Pg 83-87 of the Application.

10 Pg 95-101 of the Application.

11 Pg 108-116 of the Application. its commercial wisdom did not approve the deviations. The CoC, taking note of the fact that the CIRP period is coming to an end on 28.01.2024, directed the RP to place before them for their consideration the mandatory resolutions in this regard. Accordingly, the CoC by a majority vote, had approved resolution seeking appropriate directions of this Hon'ble Tribunal u/s 33(1)(a) and 34(1) of IBC, 2016. Further, the CoC by a majority vote, had approved resolutions under regulation 39B 39C and 39D.

It is submitted that, the status of the IAs filed by the Applicant RP in the main CP is as follows:

IA No.1809 : This IA is posted to 26.03.2024 for filing the physical copy of the Counter by the Respondent.

3 more IAs filed u/s 43, 45 & 66 : Under verification. Not listed for non-compliance of the objection raised by the Registry.

It is submitted that, in compliance with the provisions of regulation 40B, the Applicant had filed the forms^{1212.Pg 117-119 of the Application.} along with enclosures thereto in electronic form with the board within the specified timelines.

The CoC suggested the name of the Applicant RP to appoint as Liquidator,^{1313.Pg 114 of the Application.} and in compliance to the requirements of Section 34(1) of IBC, the Applicant RP submitted his written consent^{1414.Pg 120-121 of the Application.} to act as Liquidator of the CD.

Hence, this application seeking for an order requiring the CD to be liquidated.

We have heard the Learned RP and perused the records.

From the above, it would appear that despite all possible steps as required under the Code taken during the CIRP, the CoC did not receive any viable proposal for revival of the Company. Hence, this Adjudicating Authority deems it proper to allow this Application. Accordingly, in exercise of powers conferred under Sub-Clause (i), (ii) and (iii) of Clause (b) of Sub-Section (1) of Section 33 of the IBC 2016, we proceed to pass the Order as follows:

a. This Adjudicating Authority hereby order for Liquidation of M/S. SAI BHASKAR IRONS LIMITED, which shall be conducted in the manner as laid down in Chapter III of Part II of the IBC, 2016.

b. This Adjudicating Authority hereby appoint Dr. K.V. Srinivas as Liquidator as resolved by CoC.

c. The Liquidator shall issue public announcement stating that Corporate Debtor is in Liquidation.

d. The Moratorium declared under Section 14 of the IBC, 2016 shall cease to operate here from.

e. Subject to section 52 of the IBC 2016 no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

f. All powers of the Board of Directors, Key Managerial Personnel and partners of the Corporate Debtor shall cease to have effect and shall be vested in the Liquidator.

g. The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code, read with Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016.

h. Personnel connected with the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs.

j. This Order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the Liquidation process by the Liquidator.

k. Copy of the Order shall be furnished to the IBBI, to the Regional Director (South Eastern Region), Ministry of Corporate Affairs; Registrar of Companies & Official Liquidator, Telangana, the Registered Office of the Corporate Debtor; and the Liquidator.

With the above directions, this Application is allowed and stands disposed of.