Mr. Shailesh Bhalchandra Desai vs Dena Bank & Anr.

Per- Charanjeet Singh Gulati, Member Technical

It is an application filed under section 60(5)(c) of the Insolvency & Bankruptcy Code, 2016 (“IBC”) r/w Regulation 45(3)(a) of the IBBI (Liquidation Process) Regulations, 2016, by Mr. Shailesh Bhalchandra Desai, Liquidator of EMI Transmission Limited (“Corporate Debtor”) seeking following reliefs:

The Petition (CP(IB)2660(MB)/2018) was admitted by this Tribunal on 11.04.2019 and CIRP of Corporate Debtor was initiated. Mr. Shailesh Bhalchandra Desai/Applicant was appointed as an Interim Resolution Professional and subsequently, in the first CoC meeting was confirmed as a Resolution Professional.

The CoC in their 10^th meeting held on 02.01.2020 and consequent e-voting concluded on 06.01.2020 rejected the Resolution Plan by 100% votes. Since the Resolution Plan failed to receive a vote of 66%, Resolution Professional has filed Liquidation Application MA No. 307/2020 u/s 33 of the Code, same was heard on various dates and on 14.08.2020, the Liquidation Order was passed by this Tribunal and the Applicant was appointed as Liquidator.

The Applicant has made a public announcement on 19.08.2020 in Form B of Schedule Il as per Regulation 12 of Liquidation Regulations, 2016, towards calling for submission of claims from all the stakeholders.

The Applicant has received claims from the creditors. The Applicant has verified the claims based on the supporting documents/information provided by the stakeholder and thus has filed a list of stakeholders before this Tribunal on 09.10.2020, in line with Regulation 31 of IBBI (Liquidation Process) Regulations, 2016. List of Stakeholders is as follows:

The Applicant constituted the stakeholder’s consultation committee (“SCC”) in terms of Regulation 31A of the Liquidation Process Regulation.

The Applicant conducted Thirty-Four e-auction process from 19.10.2020 to 19.10.2022 with “AS IS WHERE IS BASIS”, “AS IS WHAT IS” AND “WHATEVER THERE IS BASIS” AND “NO RECOURSE BASIS”. The mode of sale of assets was in accordance with Schedule - I, under Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016.

During the SCC meeting, the Applicant informed the SCC members that as per Regulation 32 of Liquidation Regulations, 2016, sale of the Corporate Debtor as a going concern. A public announcement was given in the newspaper namely Business Standard (Mumbai edition - English) and Navshakti (Mumbai edition - Marathi) for sale of Corporate Debtor as going concern along with remaining assets. The 34th E-auction Process was scheduled for 14.11.2022, however due to certain technical difficulty it was extended till 15.11.2022.

The Applicant submits that below mentioned assets were put under Sale:

The Applicant submits that he has received the highest bids from L7 Hitech Private Limited and was considered as Successful Bidder to buy the Corporate Debtor as a going concern along with the remaining assets of Corporate Debtor. The Applicant has received the entire amount of sale consideration of Rs. 6.60 Crores, a sale certificate dated 18.11.2022 was also issued to the successful bidder. The E-auction result is as follows:

On 13.04.2023, the Applicant issued a letter to L7 Hitech Private Limited / Successful Bidder confirming the full and final handover of the Corporate Debtor and its charge, properties, receipt of all papers, proceedings etc.

On 17.01.2023, L7 Hitech Private Limited/ Successful bidder filed an Interlocutory Application 315 of 2023 before this Tribunal, seeking certain directions, reliefs, concessions and necessary approvals for effectuating the transfer of the Auction Assets in favour of L7 Hitech Private Limited as the Successful Bidder. The said IA No. 315 of 2023 was disposed of by this Tribunal vide order dated 08.12.2023.

The Applicant submits that during 6^th SCC meeting held on 10.03.2023, the SCC members have finalized that the applications filed by the Applicant for avoidance transaction will be pursued by the SCC members with Bank of Baroda being a lead bank. The list of pending avoidance applications as under:

The Applicant submits that the liquidation costs has exceeded the estimated liquidation cost provided for in the preliminary report on account of running of liquidation process by more than 30 months instead of 1 year against which the liquidation cost estimated.

Further, in compliance of the Regulation 45(3)(a) of the Liquidation Process Regulations, the Applicant has filed the present Application for closure of the liquidation process of the Corporate Debtor under Regulation 45 (3)(a) of the Liquidation Process Regulations. The Applicant has also filed the final report and the compliance certificate in Form H before this Tribunal.

The details of the assets as per Asset Memorandum and Final Sale Report are as under:

Certain discrepancies in amounts were noted in Form H, and clarification were sought for the same vide order dated 15.04.2024. In compliance with the said order, the Applicant filed an additional affidavit dated 30.04.2024 and has presented clarification chart, which is reproduced below:

We observe that the Corporate Debtor has been sold to L7 Hitech Private Limited as a going concern, the entire sale consideration has been received. The same has been distributed among the stakeholders in accordance with the provisions of Section 53 of the Code, read with Regulation 42 of the Liquidation Process Regulations. The Chart in paragraph 16 of this order does not reflect the opening balance. Further, the aforementioned chart at para 17, clarifies the distribution to the secured creditors, with an amount of Rs. 72,37,10,336 being distributed to them.

Provident Fund dues amounting to Rs. 6,67,484 have been paid in full, as evident from the Statement of Receipt and Payments, 2021. Furthermore, workmen dues (Rs. 5,67,630) have been paid, as per the Statement of Receipt and Payments of 2022 attached to the present application. Moreover, the closing balance remaining in the bank account is Rs. 14,01,548 as seen from the Statement of Receipt and Payments, 2023. From the statement of Receipts and Payment for the years ended on 31.03.2021, 31.03.2022 and 31.03.2023 it is seen the liquidation costs have been incurred as under:

Furthermore, regarding the operation of Bank Account, the Applicant has submitted in their additional affidavit that after settling the current liquidation expenses (till the date of issuance of closure order) and transferring the balance amount to the secured creditors, the specified/Liquidation account will be closed. Following this, the lender will proceed with the avoidance application, and any recovered amount will be deposited according to the lender’s designated account.

In view of the aforesaid facts, we are of the considered opinion that this is a fit case for the closure of the liquidation process of the Corporate Debtor. Accordingly, we hereby order the closure of the liquidation process of the Corporate Debtor i.e. EMI Transmission Limited. Mr. Shailesh Bhalchandra Desai Applicant/Liquidator has been discharged from the date of this order.

Further, Bank of Baroda has been authorised to represent on behalf of stakeholders in all the application filed by the Liquidator under Section 43 and 66 of the Code.

Registry is directed to communicate this Order to the Registrar of Companies, Mumbai and to the Insolvency and Bankruptcy Board of India;

The IA-1656/2023 filed by the RP for the closure of the liquidation process of the Corporate Debtor stands allowed.