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Judgment
PER: BENCH
This Application is filed by the Liquidator for M/s Maqdoom Moghny Enterprises Private Limited (herein after referred as ‘corporate debtor’) u/s 54(1) of The Insolvency & Bankruptcy Code, 2016 (herein after referred as ‘IBC’), R/w Regulation 45(3) of (Liquidation Process) Regulations, 2016, seeking for the following relief:
To take on record FORM-H and to pass an order that the Corporate Debtor has been dissolved.
To pass an order directing the Respondent to strike off the company name from the Register of Companies.
To pass an order declaring that the Applicant is discharged from all the duties and liabilities in connection with the liquidation of Corporate Debtor.
To put concisely, this Tribunal, on 13.05.2022, through company application CP (IB) No. 771/9/HDB/2019 admitted the corporate debtor into Corporate Insolvency Resolution Process (CIRP). This Tribunal passed order of Liquidation in IA. No. 968/2023 dated 28.06.2023, and appointed Shri Sreedhar Nukala as the Liquidator.
Period of Liquidation Process: The Liquidation process commenced on 28.06.202 and the necessary approvals for extension of the liquidation period from the Hon’ble Adjudicating Authority are tabled as below:
| Sno | Particulars and Reason | Valid upto |
| 1 | Extension of 4 months granted vide orders in IA (IBC) No 1327/2024 | 27.10.2024 |
| 2 | IA 2198/2024. | 27.01.2025 |
Brief overview of the liquidation process :-
a. Invitation of Claims in Form B: The Liquidator on 03.07.2023 issued a public announcement in Form B, inviting claims from stakeholders, through Financial Express (English), Nava Telangana (Telugu), and Siasat (Urdu); and constituted the Stakeholders Committee (SCC).
b. Constitution of SCC/ List of Stakeholders: That on 14.05.2024 the Liquidator filed an application before this Authority in IA(IBC) 1040/2024 to take on record the revised list of stakeholders consultation Committee (SCC). The revised SCC comprises the relinquished financial creditor, Indian Overseas Bank, with an admitted claim of Rs. 5,86,05,532.18/-, TS SFC/APSFC with an admitted claim of Rs. 2,16,25,038/-, and the sole operational creditor, Manish Fashionworld Private Limited, with an admitted claim of Rs. 65,26,453/-. It is further stated that the dues of the unrelinquished financial creditor, Kotak Mahindra, was settled.
c. Valuation of the CD’s Assets: The Stakeholders Consultation Committee (SCC) in the First Meeting held on 05.07.2023 accepted the Appointment of Registered Valuers under Plant & Machinery (2 valuers each) and Securities & Other Financial Assets (2 valuers each). That the Liquidator has received the valuation report from the Registered Valuers and appointed two valuers.
d. Asset Memorandum: The Liquidator prepared the Asset Memorandum which was filed with this Tribunal on 11.09.2023 along with Preliminary Report.
e. SCC Meetings during Liquidation: A total of 12 meetings were convened for the SCC, wherein the Liquidator, in collaboration with the SCC, had conducted the liquidation proceedings in adherence to the statutory provisions of the Code.
f. Progress Reports filed during the conduct of Liquidation Process: Pursuant to Regulation 13 & 15 of Liquidation Regulations, the Liquidator regularly filed the Progress Reports with this Tribunal, which is tabulated below:
| SNo | Progress Report | Submitted on | Filed vide IA# |
|---|---|---|---|
| 1. | Preliminary Report | 11.09.2023 | |
| 2. | 1st Progress Report | 14.07.2023 | IA 1216/2023 |
| 3. | 2nd Progress Report | 13.10.2023 | IA 1724/2023 |
| 4. | 3rd Progress Report | 12.01.2024 | IA 389/2024 |
| 5. | 4th Progress Report | 14.04.2024 | IA 863/2024 |
| 6. | 5th Progress Report | 15.07.2024 | IA(IBC) (Liq.) Progress Report 15/2024 |
| 7. | 6th Progress Report | 15.10.2024 | IA(IBC) (Liq.) Progress Report 94/2024 |
| 8. | 7th Progress Report (Final) | 28.12.2024 | IA(IBC) (DIS) 01/2025 |
g. Sale Notices issued during the Liquidation Process: The Liquidator has put E- Auctions on 30.09.2023, 22.11.2023, 26.02.2024, 22.03.2024, and 24.04.2024:
h. Details of the CD’s properties and Sale Process: The CD possesses the following properties:
Plant and Machinery items Sewing Machines, 1KVGenerator, Chairs, Dismantled Partitions (Under Plant and Machinery),
Plant and Machinery -4 Wheeler,
Inventories being clothes, ready-made garments including designer wear. (SFA)
Cash and bank.
Details of realisation and distribution of proceeds:
The Plant and Machinery items Sewing Machines, 1KVGenerator, Chairs, Dismantled Partitions (Under Plant and Machinery) category other than vehicle was realized for an amount of Rs. 231000/-
The plant and Machinery – 4 wheeler was realized for an amount of Rs. 1000000/- One of the Financial Creditor (Kotak Mahindra Bank) who has not relinquished his right has submitted that he has settled the 4wheeler to the promoter against the dues to it for Rs. 10,00,000/- as against the claim of Rs.3197105/- as full and final settlement after Complying the Regulation 31A of the IBBI (Liquidation process) Regulations, 2016.
Inventories being cloths, ready-made garments including designer wear. (SFA) was realized for an amount of Rs. 1530900/- and Rs.40725/- collected from the bidder as penal interest.
Rs.10000/- received from the erstwhile management as cash in hand.
The total received in the Liquidation account were Rs.18,31,405 and they were disbursed according to the waterfall mechanism u/s 53 of the Code, as detailed in the table below:
| S No. | Particulars | Amount (Rs.) |
|---|---|---|
| 1 | Opening Balance as on 01.04.2024 | 249730 |
| 2 | Receipt on sale of Inventory | 1530900 |
| 3 | Interest on collection | 40775 |
| 4 | Cash deposited into the Bank | 10000 |
| Total | 1831405 |
| S No. | Particulars | Amount (Rs.) |
|---|---|---|
| 1 | 4 Closures e-auction Service provider | 5900 |
| 2 | Bank charges | 255 |
| 3 | Advocate Fee(Raveena Modi) | 22000 |
| 4 | Advocate Fee(P. Rama Krishna) | 24000 |
| 4 | Liquidator fee paid | 500000 |
| 5 | Advertisement Charges (Sri Vinayaka Ads Publication Cost) | 58968 |
| 6 | Liquidation Cost/CIRP Cost Share Of IOB | 891210 |
| 7 | Liquidation Cost/CIRP Cost Share Of TGSFC | 328790 |
| 8 | Closing Balance Bank accounts | 282 |
| Total | 18,31,405 |
j. As per Regulation 45 (3) the liquidator has filed the Final Report dated 28.10.2024 upon closure of liquidation process of the corporate debtor.
(Final Report on Liquidation process of the CD is annexed to the Application and marked as Annexure F)
(Compliance Certificate in ‘Form H’. is annexed to the Application and marked as Annexure H).
k. Liquidation Cost details: The total Liquidation costs of the CD as on the date of filing this application is Rs. 14,47,168/-including the Liquidators fee.
l. Designated Bank Account for the CD in Liquidation: As per Regulation 2A (2) of the Liquidation Regulations, the Liquidator opened the designated Liquidation Account which was operated from 27.09.2023. The account details are: Account Number: 5476621055 CENTRAL BANK OF INDIA KHAIRATHABA, HYDERABAD, TELANGANA-500004 IFSC Code: CBIN0280810
All the transactions during the liquidation process of the Corporate Debtor were done through these accounts and after the proceeds are distributed as per the waterfall mechanism and a meagre amount of Rs. 282/- is lying in the account with Central Bank of India, as part of their charges and the same will be appropriated by Central Bank of India with simultaneous order of this Tribunal under section 54 of IBC.
We have heard Mr. Peri Rama Krishna, Ld. Counsel for the Liquidator and perused the record.
We have gone through the gist of the minutes of the 10th SCC held on 20.10.2024, wherein it is recorded that Sri Ramesh V (Dealing Officer of the Account) Representing Asset Reconstruction Company (India) Limited (ARCIL (ARC) being the assignee of Indian Overseas Bank (IOB) with voting right of 73,05% and Sri Jagadishwar, Representing TGSFC being the Manager With voting right 26.95% were present. Further it is recorded that the balance amount available with him will be paid to TGSFC and Indian Overseas Bank as the share of their CIRP costs incurred and Liquidation costs borne by them.
It is further noted that in the 12th SCC Meeting held on 16.12.2024, it has been recorded that SCC members have agreed to discharge the Liquidator as the distribution of sale proceeds is completed
The Liquidator has filed compliance certificate in Form-H (Annexure-H, page 87 of the Application). As per the same the liquidation commenced on 28.06.2023. A total of 12 SCC meetings were held. The fair and liquidation value is Rs. 30.71 lakhs and Rs. 30.71 lakhs respectively.
The Liquidator has submitted that the Liquidation cost is Rs.14,47,168/-, exceeding the estimated cost of Rs.9,90,000/- as submitted in the Asset Memorandum and submitted that the increase in the Liquidation cost is due to the fact that due to the low demand for the old items of assets which are slow moving and several auction notices were issued to sell them.
The various provisions of the Code dealing with the dissolution of the Corporate Debtor are as follows:
54-Dissolution of Corporate Debtor.
(1)Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor.
(2)The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.
(3)A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered.
Regulation 45 of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 reads as under: -
Regulation 45: Final report prior to dissolution.
(1)When the corporate debtor is liquidated, the liquidator shall make an account of the liquidation, showing how it has been conducted and how the corporate debtor’s assets have been liquidated.
(2)If the liquidation cost exceeds the estimated liquidation cost provided in the Preliminary Report, the liquidator shall explain the reasons for the same.
(3)The liquidator shall submit an application along with the final report and the compliance certificate in form H to the Adjudicating Authority for – (a) closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern; or (b) for the dissolution of the corporate debtor, in cases not covered under clause (a).
We are satisfied that the criteria laid down under law has been fully complied with. As such, the Corporate Debtor is liable to be dissolved. Hence, we hereby order dissolution of the Corporate Debtor as under: -
In view of the above facts and circumstances, this Adjudicating Authority in exercise of the powers conferred under sub-section (2) of section 54 of the Code hereby order as under:-
The Corporate Debtor, viz., M/s Maqdoom Moghny Enterprises Private Limited is hereby dissolved from the date of this Order and the Liquidator stands relieved, subject to procedural compliances.
The Liquidator and the Registry are directed to serve a copy of this order upon the Registrar of Companies, Hyderabad immediately within fourteen days of receipt of this order. The Registrar of Companies shall take further necessary action upon receipt of a copy of this order.
Upon dissolution of the Corporate Debtor, the records of the Company which are in possession of the Liquidator, be handed over to the IBBI.
A copy of this order be also forwarded to the Insolvency & Bankruptcy Board of India, New Delhi.
In terms of the above, IA (Dis) No. 3 of 2025 filed by the Liquidator appointed for M/s Maqdoom Moghny Enterprises Private Limited (Corporate Debtor) for dissolution of the Company stands disposed of accordingly. Since the Corporate Debtor stood dissolved vide this order and no proceedings are now pending, therefore, the Registry is directed to consign the file to records.