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Judgment
Per: SAMEER KAKAR, MEMBER (TECHNICAL)
IA/IBC/366/CHE/2023 has been filed under Section 33(1)(a) and Section 34(1) of the Insolvency & Bankruptcy Code, 2016 by the Resolution Professional of the Corporate Debtor viz., M/s. Saheli Exports Private Limited, seeking the following reliefs:-
a)That this Hon'ble Tribunal may be pleased to pass an order for Liquidation of the Corporate Debtor namely M/s. Saheli Exports Private Limited;
b)That this Hon'ble Tribunal may be pleased to pass an order by appointing M/s. SPP Insolvency Professionals LLP (IBBI/IPE-0143/IPA-1/2022-23/50033) as Liquidator for administering the Liquidation Process of the Corporate Debtor, and
c)To Pass such orders or further orders which this Hon'ble Tribunal may deem to be fit and proper in the interest of justice.
Vide an Order dated 21.03.2022, this Tribunal ordered for commencement of CIRP proceedings on the Corporate Debtor M/s. Saheli Exports Private Limited in CP(IB)/5/CHE/2021 and appointed the Applicant herein as the IRP.
The IRP caused the Public Announcement, calling for the claims. The said public announcement was made on 24.03.2022 in English daily "The New Indian Express" and Tamil daily "Dhinamani" Chennai Edition. Pursuant to the public announcement, the IRP received various claims and constituted the CoC. The composition of the CoC and stakeholders were modified from time to time. The list of various stakeholders is provided at page No.3 of the Application.
The CoC in its first meeting held on 22.04.2022 confirmed the IRP as RP of the Corporate Debtor. Thereafter, an application under Section 19(2) of the Code was filed on 18.04.2022. The same was withdrawn on 19.01.2023 after the receipt of details of books and accounts and documents of the Corporate Debtor from the erstwhile management.
Extension of 90 days was allowed by this Tribunal in terms of the order dated 19.01.2023 in IA(IBC)/29(CHE)/2023. The extended period got completed on 16.12.2022.
The Sixth CoC meeting was convened on 14.02.2023. The CoC sent e-mail dated 16.02.2023 with 100% majority resolved as under.
"RESOLVED THAT the consent of the Committee of Creditors be and we hereby accorded for the liquidation of the Corporate Debtor M/s. Saheli Exports Private Limited."
Further the CoC has recommended for the appointment of M/s. SPP Insolvency Professionals, LLP, IPE as Liquidator of the Corporate Debtor vide e-mail dated 16.02.2023. AFA of proposed Liquidator is valid till 14.02.2024. Form-H is appended from page No.92 to 102.
It is seen from para-10 of the Application that the CoC has discussed that the business of the Corporate Debtor is not a going concern, and it is in an idle position. It was also discussed that the Corporate Debtor has only land and building. It was also stated that because of the non-cooperation of Suspended Directors who never provided required details to RP for a long time, no steps were taken to issue Form-G i.e., invitation of resolution plans.
A Memo was filed vide Diary No.2336 dated 12.06.2023 by the Counsel for the Suspended Board of Director stating that CIRP admission order has been impugned before the Hon'ble NCLAT.
Another memo has been filed under Diary No.2929 dated 14.07.2023. Para 2 of the said Memo records that the admission order passed by this Tribunal dated 21.03.2022 was challenged by one of the ex-director of the Corporate Debtor i.e., Mr. B.V.Gautam before the Hon'ble NCLAT and the same was numbered as Company Appeal (AT)(CH)(INS)No.148 of 2022. Para 3 of the said Memo records that the said Company Appeal was heard on 07.06.2023 and 08.06.2023 and the Hon'ble NCLAT vide its Order dated 19.06.2023 dismissed the said Appeal.
The said judgement dated 19.06.2023 of the Hon'ble NCLAT has been challenged in a Civil Appeal before the Hon'ble Supreme court vide Diary No.27560/2023 dated 12.07.2023.
During the hearing, Ld. Counsel Mr. Vikram P. Jain appeared on behalf of the Suspended Board of Director and stated that no stay has been granted by the Hon'ble Supreme Court in the matter so far.
Heard the Counsel and perused the documents.
In so far as the Inv.P/IBC/6/CHE/2023 is concerned, the same has been filed by one of the Suspended Director of the Corporate Debtor seeking the following reliefs.
a. Permit the Applicant herein to intervene in the IA/(IBC)/366/2023 in CP/5/CHE/2021 filed by the Respondent under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 and permit the Applicant to put forward its contentions and make submissions at the time of hearing for the consideration of this Hon'ble Tribunal.
b. To consider this Application and the Applicant's contention before disposing off or passing any final order in LA/IBC/366/2023 in CP/5/CHE/2021; and
c. Pass such further or other Orders which this Hon'ble Tribunal may deem fit and proper in the circumstances of this case and thus render justice.
It is seen that this Application has been filed to intervene in the liquidation application and put forth the views of the Suspended Board of Directors on the liquidation application filed by the Resolution Professional. Mr. Vikram P. Jain, Advocate extensively argued on the liquidation application.
It is also seen that arguments were advanced by Mr. T.K.Bhaskar, Advocate in the hearing held on 11.05.2023 and also by Mr. Vikram P. Jain, Advocate on 13.06.2023. On these two dates, considering that the Appeal was pending before the Hon'ble NCLAT, the decision in IA/366/2023 was deferred. However in the present case, the CIRP period of the Corporate Debtor is over and the CoC has with 100% majority resolved to liquidate the Corporate Debtor.
The commercial wisdom of the CoC cannot be put to question by this Adjudicating Authority on the matters relating to approval of the Resolution Plan / liquidation. In the present case, the collective commercial decision of the CoC is to put the Corporate Debtor to liquidation. The same cannot be questioned by this Adjudicating Authority. As such in our view the present Application Inv.P/IBC/6/CHE/2023 is devoid of merit and is accordingly dismissed.
In so far as IA(IBC)/366(CHE)/2023 is concerned, taking into consideration the fact that the CoC of the Corporate Debtor has already resolved by 100% majority to liquidate the Corporate Debtor and also that the CIRP period of the Corporate Debtor has already ended on 16.12.2022 without the approval of any Resolution Plan with respect to the Corporate Debtor, we are constrained to order for liquidation of the Corporate Debtor. Accordingly, the Corporate Debtor is ordered for liquidation.
M/s. SPP Insolvency Professionals LLP (IPE/P-0018 and IBBI/IPE-0143/IPA-1/2022-23/50033) is hereby appointed as the Liquidator of the Corporate Debtor to carry out the liquidation process subject to the following terms of the directions: -
The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and Regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended upto date enjoined.
The Liquidator shall issue the public announcement that the Corporate Debtor is in liquidation. In relation to officers/ employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge.
The Liquidator shall investigate the financial affairs of the Corporate Debtor particularly, in relation to preferential transactions/ undervalued transactions and such other like transactions including fraudulent preferences and file suitable application before this Adjudicating Authority.
The Registry is directed to communicate this order to the Registrar of Companies, Chennai and to the Insolvency and Bankruptcy Board of India;
In terms of section 178 of the Income Tax Act, 1961, the Liquidator shall give necessary intimation to the Income Tax Department. In relation to other fiscal and regulatory authorities which govern the Corporate Debtor, the Liquidator shall also duly intimate about the order of liquidation.
The order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and that a fresh Moratorium under section 33(5) of the Insolvency and Bankruptcy Code shall commence.
The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016.
The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section – 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company Applications during the process of liquidation.
The Liquidator shall submit a Preliminary report to this Tribunal within 75 (seventy-five) days from the liquidation commencement date as per regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016. Further such other or further report as are required to be filed under the relevant Regulations, in addition, shall also be duly filed by him with this Adjudicating Authority.
Copy of this order be sent to the financial creditors, Corporate Debtor and the Liquidator for taking necessary steps and for extending the necessary co-operation in relation to the Liquidation process of the Corporate Debtor.
With the above directions, this IA/IBC/366/CHE/2023 stands allowed.