Mr P Raghava Rao vs Anjali Water Ford Hospitality and Infra Pvt Ltd

PER: BENCH

This Application is filed by the Liquidator for M/s Anjali Waterford Hospitality & Infra Pvt Ltd/Corporate Debtor u/s 54 of Insolvency & Bankruptcy Code (IBC), 2016, R/w Regulation 45 of (Liquidation Process) Regulations, 2016 and Rule 11 of NCLT Rules, seeking dissolution of the Corporate Debtor.

To put concisely, this Tribunal, on 22.02.2021, through company application CP (IB) No. 251/9/HDB/2020 admitted the CD for Corporate Insolvency Resolution Process (CIRP) and appointed Shri Pradeep Kumar Sravanam as the Interim Resolution Professional (IRP), who was subsequently confirmed as the Resolution Professional (RP). With no Resolution Plans received, this Tribunal passed order of Liquidation in IA. No. 248/2022 dated 13.05.2022, and appointed Shri Pradeep Kumar Sravanam as the Liquidator.

Since on 10.02.2023, Shri Pradeep Kumar Sravanam, expired, this Adjudicating Authority, appointed the Applicant herein as the new Liquidator vide order passed in IA. No. 529/2023 dated 31.03.2023. Further, this Adjudicating Authority, by order dated 01.05.2023 in IA #713/2023, excluded 61 days from the liquidation period, considering the time lost.

Period of Liquidation Process: The Liquidation process commenced on 13.05.2022 and the necessary approvals for extension of the liquidation period from the Hon’ble Adjudicating Authority are tabled as below:

Brief overview of the liquidation process :-

a. Invitation of Claims in Form B: The Liquidator on 17.05.2022 issued a public announcement in Form B, inviting claims from stakeholders, through Financial Express (English), Nava Telangana (Telugu @Hyderabad), and Prajasakti (Telugu @Rajahmundry); and constituted the Stakeholders Committee (SCC).

b. Constitution of SCC/ List of Stakeholders: The Stakeholders Committee (SCC) comprises sole member i.e. M/s. Kakinada Coop Town Bank, which holds a claim amounting to Rs. 245.00 lakhs with 100% voting rights. Subsequently, the Liquidator received five claims totalling Rs. 2083.00 lakhs, which were not considered by the Liquidator on account of failure to provide necessary clarifications and documents by the claimants. Additionally, the two claims received from the Income Tax Department and the Employee Provident Fund Department were submitted beyond the 90-day period and were, therefore, rejected.

c. Valuation of the CD’s Assets: According to Regulation 27 of the IBBI (CIRP Regulations), 2016, the IRP/RP appointed registered valuers who are registered under IBBI. They conducted a physical verification and submitted the Fair Value and Liquidation value of the property during CIRP on 22.02.2021. Since there was no substantial change; the SCC considered adopting the same valuation report.

Rs. in lakhs

d. Asset Memorandum: The erstwhile Liquidator prepared the Asset Memorandum which was filed with this Tribunal on 03.09.2022 along with Preliminary Report. The indicated value of the assets in the Asset Memorandum is Rs. 323.40 lakhs for land and buildings and Rs.109.49 lakhs for Security and Financial Assets. The erstwhile Liquidator has considered only the share of M/s Vinamratha Industries Ltd. The shares of M/s Sasil Hospitality India Ltd of Rs.197.79 lakhs , M/s Suryachakra Energy and Infrastructure Pvt Ltd of Rs.844.80 lakhs, M/s Sam Housing and Infra Pvt Ltd of 18.00 lakhs, Short term loan of Rs.244.76 lakhs written off by the suspended board during the look back period without supporting documents have not been included in the Asset Memorandum by the erstwhile Liquidator. However, an application IA#248/2024 u/s 43 has been filed for these transactions by the Applicant Liquidator. (Asset Memorandum is annexed herewith and marked as Annexure A06)

e. SCC Meetings during Liquidation: A total of 17 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:

g. Sale Notices issued during the Liquidation Process: The erstwhile Liquidator, issued 3 sale notices while the applicant Liquidator, issued 5 sale notices with the 8^th Sale Notice concluding successfully. Details are as tabulated below:

h. Details of the CD’s properties and Sale Process:

Details of realisation and distribution of proceeds:

** As per the decision taken in the 17^th SCC Meeting, an amount of Rs.3,65,000.10p, has been transferred to the Liquidator’s Current Account as a contingency provision to cover the Liquidator’s Fees, future litigation, ROC Filings & Storage of Data etc. It was further resolved that any surplus from this amount would be transferred to the shareholders immediately upon receiving the dissolution order from this Tribunal.

j. As per Regulation 45 (3) the liquidator has filed the Final Report dated 28.06.2024 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 A12)

(Compliance Certificate in ‘Form H’. is annexed to the Application and marked as Annexure A13).

k. Details of the matters pending for decision concerning the Corporate Debtor are submitted as below:

The Liquidator submits that as the Pleadings are complete in these matters and the financial creditor is not interested in pursuing them, the Liquidator pleads to decide the matter on merits and proceeds if any, be distributed to the shareholders as per Section 53(1)(h) of the Code.

l. Liquidation Cost details: The total Liquidation costs of the CD as on the date of filing this application is Rs. 25,29,236.90p including the Liquidators fee.

m. Designated Bank Account for the CD in Liquidation: As per Regulation 2A (2) of the Liquidation Regulations, the erstwhile Liquidator opened the designated Liquidation Account which was operated from 01.08.2022 to 26.06.2024. The account details are: The Kakinada Cooperative Town Bank Limited Account No. 100111101000255 Branch: Kakinada Branch IFSC Code : UPIV0SKCTVL 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 keeping an amount of Rs. 3,65,000.10p as contingency etc, as resolved in the 17^th SCC Meeting with Liquidator’s Current Account, the account has been closed on 26.06.2024 with a zero balance. Thus, the Liquidator submits that the Liquidation Process of the CD is complete and sought for dissolution of the Company.

We heard Ms. Manoranjani, Ld. Counsel for the Liquidator and perused the record.

We have gone through the gist of the minutes of the 15th SCC held on 15.04.2024, wherein it is recorded that the sole financial creditor i.e. Kakinada Co-operative Town Bank Limited confirmed receipt of the claim amount of Rs. 2,45,00,327/-. Further it is recorded that the SCC with 100% voting, ratified payment of Rs. 3,12,599/- which includes CIRP expenses and the Liquidation expenses, to the legal heirs of the erstwhile Liquidator.

It was further recorded in the minutes of the 16^th SCC meeting held on 14.05.2024 that the Sole Financial Creditor, Kakinada Cooperative Town Bank Ltd is not interested in pursuing IA No. 247 & 248 of 2024 with regard to avoidable transactions, hence the same were dismissed by this Tribunal vide order dated 26.07.2024.

It is further noted that in the 17^th SCC Meeting held on 26.06.2024, it has been recorded that an amount of Rs. 3,12,500/- payable to the erstwhile Liquidator has been transferred to the IBBI Corporation Liquidation A/c and that an amount of Rs. 24,19,935/- has been distributed to the shareholders as per Section 53 (1)(h) of the Code. It is further observed that in the said meeting, the SCC members after due deliberations, agreed to transfer the balance amount of Rs. 3,65,000.10 to the current account of the Liquidator considering the requirement for closing the Liquidation A/c of the Corporate Debtor in Kakinada Co-operative Town Bank Ltd for clearing certain expenses.

The Liquidator has filed compliance certificate in Form-H (Annexure-A-13, page 175 of the Application). As per the same the liquidation commenced on 13.05.2022. A total of 17 SCC meetings were held. The fair and liquidation value is Rs. 1059.11 lakhs and Rs. 619.94 lakhs respectively. The amount realised in the 8^th e-auction conducted on 23.02.2024 is Rs. 2,46,00,000/-. The admitted claim amount of the sole Financial Creditor is Rs. 2,45,00,327/- which has been paid in full.

The various provisions of the Code dealing with the dissolution of the Corporate Debtor are as follows:

Regulation 45 of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 reads as under: -

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 Anjali Waterford Hospitality & Infra Pvt Ltd 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. 8 of 2024 filed by the Liquidator appointed for M/s Anjali Waterford Hospitality & Infra Pvt. Ltd (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.