M/s Sumukhi Sales Private Limited vs M/s YM Foodways Private Limited

PER: RAHUL BHATNAGAR, MEMBER (TECHNICAL)

This application bearing number I.A. 5954/2022 in CP(IB) 421/ND/2019 has been filed for dissolution of Corporate Debtor under Section 54 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as IBC) praying for the following reliefs:

To put it briefly, the facts of the case are that the Application under section 9 of IBC for initiating CIRP was admitted by this Adjudicating Authority vide order dated 21.11.2019 and Mr. Amit Kaushal was appointed as IRP.

Applicant submitted that the Committee of Creditors (“CoC”) was constituted on 12/12/2019 with two Operational Creditors only as no financial creditor submitted his claim.

Applicant submitted that, COC in its meeting dated 17.02.2020 resolved to replace Mr. Amit Kaushal by Mr. Satya Prakash IP Registration No-IBBI/IPA- 002/IP-N00906/2019-2020/12920 as Resolution professional for the Corporate Debtor and this was accordingly confirmed by this Adjudicating Authority vide its Order dated 27.02.2020.

Applicant submitted that the Form G was published on 18.02.2020, but no expression of interest “EOI” was received, reason being that the Corporate Debtor has closed its operations well before the Insolvency Commencement Date “ICD”, and no assets were left except book entries.

Applicant submitted that , CoC in its 4th meeting held on 25.08.2020 unanimously (with 100% vote share) resolved that Corporate debtor should be liquidated in accordance with the provisions of the IBC-2016.

Applicant further submitted that on review of the Transaction Auditor Report (hereinafter referred to as TAR), search and seizure operation conducted by the Income Tax Department and other relevant documents of the Corporate Debtor, erstwhile Resolution Professional has formed his opinion that transactions amounting to Rs. 1123.87 Crs falls within the scope of the fraudulent or wrongful trading as per the provisions of the section 66 of the Code. Accordingly an application IA-5610/2020 under section 25(2)(j) read with Section 66 of the Insolvency and Bankruptcy Code, 2016 was filed, but it was dismissed by this Adjudicating Authority vide order dated 21.02.2022 on the ground that the liability was not specified by the applicant on respective respondents in accordance with their tenure in office as Director.

Applicant further submitted that on the decision of CoC, erstwhile RP filed an application (IA No- 4943/2020 u/s 33 (1) & 34 (3) for liquidation of Corporate Debtor and this Adjudicating Authority passed an order u/s 33 (2) to liquidate the Corporate debtor on 04.02.2021 and erstwhile RP was appointed as Liquidator.

Applicant submitted that the Liquidator again filed an IA- 1328/2022 before the this Adjudicating Authority on 09.03.2022 for PUFE transactions amounting to Rs. 1123.87 Crs under Section 25 (2)(j) read with Section 66 of the Insolvency and Bankruptcy Code, 2016 seeking appropriate directions in continuation to the order of this Adjudicating Authority dated 21.02.2022 in the matter of IA-5610/2020.

Applicant submitted that pursuant to liquidation, public announcement in newspapers and at centralized platform managed by IBBI was issued on 13.02.2021 for invitation of claims.

Applicant submitted the financial position of the corporate debtor as on date of commencement of Liquidation which is as below along with Audited Financial Statements of the Corporate Debtor as on March 31, 2020;

Applicant submitted that in response to public announcement made on 13/02/2021 per the regulation 12 of IBBI (Liquidation Process) Regulations-2016 Liquidator received 2 claims from government departments as Operational Creditors and 2 other Operational Creditors. Summary of claims as received during the Liquidation are given hereunder:-

Applicant submitted that the Stakeholders Consultation Committee was constituted on 17/04/2021 comprising 2- OC- govt, 2- OC- Others, details of which are as under:

Applicant submitted that the Liquidator has already declared in earlier progress reports that the Corporate Debtor has closed its operation well before the Initiation of CIRP and has no assets, stock, etc to realize, and the Liquidator has completed the liquidation process except disposal of PUFE transaction issue.

Applicant submitted that the Liquidator realized FDR. A brief detail of realization during the Liquidation are as under;

As per the provisions of section 53 of IBC, 2016, the realised amount has been adjusted against Liquidation Cost, and nothing was distributed to any other Stakeholders, rather the Liquidation cost is still due to recover, details of which are as under:

Applicant submitted that the total cash as Liquidation value was Rs. 471146/- which was utilised against Liquidation Cost of Rs.20,56,129/- accordingly Rs.1584983/- still pending to recover.

Further the Applicant submitted that the Stakeholders denied to reimburse the pending Liquidation cost.

Applicant submitted that the Liquidator sent intimation(s) as applicable in respect of the Corporate Debtor to statutory authorities which are as below.

Applicant submitted that the Liquidation Bank Account was closed on 22/07/2022.

Applicant submitted that the Application IA- 1328/2022 on PFUE Transactions amounting to Rs. 1123.87 Crs under Section 25 (2)(j) read with Section 66 of the Insolvency and Bankruptcy Code, 2016 is pending before this Adjudicating Authority and the same has already been assigned under regulation 37A and the assignment has also been approved by this Adjudicating Authority as vide order dated 03/11/2022. Thus the said Application shall be persued by the assignee i.e VRSA Consultancy LLP.

As per the Deed of Assignments dated 24.05.2022 the sharing of the proceeds of the assets will be as per the Deed of Assignment which has already been placed on record in the IA 2881/2022. The liquidator will be the Observer for proceedings in distribution of assets as per the Schedule 3 of the Deed of Assignment.

We have gone through the present Application filed by the Liquidator praying for closure of liquidation process and dissolution of the Corporate Debtor and in terms of Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 45 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

That Applicant/Liquidator has filed application(s) and various documents/Reports which were required to be submitted as per the provisions of IBC, 2016 read with relevant regulations.

That the Liquidation process has been conducted as per the timeline indicated in regulation 47 details of which has been given in Form-H accompanied with this application.

That as required by Regulation 45(3) of IBBI (Liquidation Process) Regulations, 2016, Final Report has been filed by the Liquidator.

That compliance report in form H in terms of regulation 45(3) was placed on record by the Applicant.

That there is no litigation pending against the Corporate Debtor to the best of knowledge, belief and effort of the Liquidator.

That in view of the facts and circumstances, since the Applicant submitted that all the assets of Corporate Debtor have been completely liquidated and/ or distributed to stakeholders as the provisions of law and there is nothing left to be further liquidated.

In view of the facts and circumstances, the Applicant prayed that the Corporate Debtor may be dissolved under Section 54 of IBC, 2016.

We have heard the submissions made by the Applicant, perused the Application and the compliance Affidavit filed by the Liquidator. Here, it is worthwhile referring to Section 54 of IBC, 2016 and Section and Regulation 45 IBBI (Liquidation Process) Regulations, 2016:

That from the conjunct reading of the above provisions, this Adjudicating Authority is required to see that whether the assets of the Corporate Debtor are completely liquidated or not. In the instant case the Liquidator has furnished his Final Report and Form-H.

Since in the instant case as discussed above, all the assets of the Corporate Debtor have been liquidated and all the requirements of Regulation 45 of IBBI (Liquidation Process) Regulations, 2016 have been fulfilled, therefore, we are inclined to allow the present Application under Section 54(2) of the IBC, 2016.

Accordingly, there being no other impediment, the present Application is allowed and the Corporate Debtor is ordered to be dissolved with the immediate effect.

The Registry is directed to send a copy of this order passed under Section 54(2) to the ROC Delhi & Haryana, with which the Corporate Debtor is registered and the IBBI within seven days from the date of this order.

Let copy of the order be served to the parties.