NRS Steel Traders LLP vs Campus Impex Private Limited

Per: Bidisha Banerjee, Member (Judicial )

This Adjudicating Authority convened through hybrid mode.

IA(IBC)(LIQ.)/2 (KB)2025- is an application filed under section 33 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) by the Resolution Professional (“RP”) of Campus Impex Private Limited the Corporate Debtor, praying for initiation of liquidation process of the Corporate Debtor. This application is supported by an affidavit duly affirmed by the RP.

This Adjudicating authority, on a petition filed u/s. 7 of the IBC read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Financial Creditor, vide order dated August 13, 2024 in CP (IB)/61(KB)2021, had ordered initiation of Corporate Insolvency Resolution Process (“CIRP”) against Campus Impex Private Limited, the Corporate Debtor, appointing Mr. Surendra Kr. Agarwal, as the Interim Resolution Professional (“IRP”). The board was suspended and moratorium under Section 14 was imposed. The IRP was later confirmed as RP by the CoC in the 1^st meeting.

It is submitted that Applicant after coming to know of appointment on 14^th August, 2024, issued the Public Announcement on 16^th August, 2024 inviting claims from the creditors with the last date of submission of claims being August 27, 2024 in two Newspapers “Business Standard” and “Ekdin”.(Annexure-B).

It is submitted that corporate debtor was engaged in the business of trading of Iron and Steel Items. The applicant has been informed by the suspended Board of Directors of the corporate debtor that the corporate debtor completely stopped its business operations from 2019. Further, all the employees of the corporate debtor had quit from their respective designations prior to the business operations of the corporate debtor being stopped.

The Applicant has received the audited financial statement of corporate debtor for the financial years ended 2022, 2023 and 2024 from the management and after security of the said financial statements observed that there were no tangible assets the financial assets. The Applicant has filed the audited financial statement for the financial year ended 2024 with the Registrar of Companies.

The Applicant has constituted the CoC comprising solely of NRS Steel Traders LLP and CoC constitution report has been duly filed with this Adjudicating Authority on 5^th September, 2024. Only one Operational Creditor has filed its claim i.e. Deputy Commissioner, Central Taxes & GST.

The applicant in due compliance with Regulation 27 of the Insolvency and Bankruptcy Board of India ( Insolvency Resolution for Corporate Insolvency Resolution Process) Regulations, 2016 has appointed two registered valuers to determine the fair value and liquidation value of the corporate debtor. The valuation of the assets of the corporate debtor has been completed on 19^th November 2024.

On 10/10/2024,RP published Form G for inviting ‘Expressions of Interest’ for submitting Resolution Plan, in two newspapers namely ‘Business Standard’ in English, and ‘Ekdin’(West Bengal) in Bengali. However, RP received 13 Expressions from the interested parties. Copy of Form G, newspaper publication is enclosed as Annexure-C.

The Applicant received detailed EOI along with requisite documents from one prospective resolution applicant within the stipulated timeline i.e. October 27,2024.

The list of prospective resolution applicants was shared with the CoC and the prospective resolution applicant on November 6,2024 by the applicant.

The applicant shared the Information Memorandum along with the evaluation matrix and the request for resolution plan with the prospective resolution applicant on November 26,2024. A copy of the Information Memorandum is annexed as Annexure-D.

It is submitted that the Applicant has in due compliance with Regulation 35A of Insolvency and Bankruptcy Board of India ( Insolvency Resolution for Corporate Insolvency Resolution Process) Regulations, 2016 conducted his opinion and determination based on available documents, financial statements and bank statements for two years preceding the CIRP commencement date and has not observed any avoidance transactions. The Applicant has shared his opinion and determination with the CoC at the 4^th CoC meeting held on November 9, 2024 wherein the CoC decided to appoint a transaction auditor. Subsequently, on 13^th November 2024 , the Applicant engaged S Singhania & Associates to conduct transaction audit. The transaction auditor has also opined that there are no avoidance transactions.

The Applicant did not receive any resolution plan from the prospective resolution applicant. The applicant apprised the CoC at the 6th CoC Meeting held on January 8, 2025 regarding non-receipt of any resolution plan. As such, the CoC decided that it was prudent to liquidate the Corporate Debtor and proposed to pass a resolution to that effect at the next CoC Meeting. A copy of the Minutes of the 6th CoC meeting is annexed as Annexure-E.

It is submitted that at the 7th CoC Meeting held on January 24,2025, the CoC with 100% votes resolved to liquidate the corporate debtor. The CoC also proposed the name of Chandra Kumar Jain, Insolvency Professional as their nominee Liquidator.

The Applicant further prays that the CoC's nominee, namely, Chandra Kumar Jain, be appointed as the Liquidator. Copy of the Consent of Chandra Kumar Jain, Insolvency Professional is annexed as Annexure-H.

In view of above, the RP has prayed that the Corporate Debtor may be liquidated in accordance with Section 33(2) of the Insolvency and Bankruptcy Code, 2016 and the rules and Regulations framed thereunder and has filed the instant application being IA(IBC)(LIQ.)/2(KB)2025 under section 33(1) of the IBC seeking initiation of liquidation process against the Corporate Debtor.

We have considered the pleadings and perused records.

Section 33(1)(a) of the Code mandates that the Adjudicating Authority shall pass an order of liquidation where no resolution plan is received before the expiry of the CIRP period. Sub-section (2) thereof requires the Adjudicating Authority to pass the liquidation order where the Resolution Professional intimates to the Adjudicating Authority the decision of the Committee of Creditors approved by not less than 66% of the voting share to liquidate the Corporate Debtor.

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A conjoint reading of these two provisions leaves this Adjudicating Authority with no other option but to order liquidation of the Corporate Debtor.

In regard to appointing a Liquidator, Section 34(4) of the Code provides as under:-

We would also note a Circular No. Liq. 12011/214/2023-IBBI/840 dated 18/07/2023 issued by the IBBI under the powers given to the Board under section 34(4)(b), whereby the Board in Para 3 of the said circular recommends that the liquidator should be appointed from the panel list of IBBI.

This Bench, therefore, hereby orders as follows: -

a. IA(IBC)/2(KB)2025 filed by the RP/Applicant of Campus Impex Private Limited the Corporate Debtor, is allowed. Consequently, the Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof;

In view of the circular cited above, we hereby appoint Mr. Chandra Kumar Jain Regn. No. IBBI/IPA-001/IP-P00214/2017-2018/10414 having e-mail ID ckcacs@yahoo.co.in, , Mobile No. 9748488836 as Liquidator as provided under section 34(1) of the Code, subject, however, to his possessing a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which he is a professional member, in terms of regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2019. The Liquidator is directed to submit his consent to act as Liquidator within 10 days of receipt of this order. The erstwhile RP shall handover all papers and documents in his possession concerning the Corporate Debtor to the Liquidator appointed in this matter within 10 days.

a. The Liquidator shall initiate liquidation process as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

b. Public Notice shall be issued in the same newspapers in which advertisements were issued earlier, i.e., in “Business Standard” (English) and “Ekdin” in Vernacular Language i.e. Bengali stating that the Corporate Debtor is in liquidation.

c. All the powers of the Board of Directors, and of key managerial persons, shall cease to exist in accordance with section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator.

d. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator as would be required by the Liquidator for effectively managing the liquidation process of the Corporate Debtor.

e. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor save and except with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Code read with its proviso.

f. In accordance with section 33(7) of the Code, this liquidation order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor except to the extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator.

g. In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, within whose jurisdiction the Corporate Debtor is registered. Additionally, the Registry shall also forward a copy of this Order to the Registrar of Companies, West Bengal.

The application bearing IA(IBC)(LIQ.)/2 (KB)2025 shall stand disposed of in accordance with the above directions.

CP(IB)/61(KB)2021 is to come up for filing of Periodical Progress Report on 21/04/2025.

The Registry is directed to send e-mail copies of the order forthwith to all the parties, including the liquidator appointed as above, and their Ld. Counsel for information and for taking necessary steps.

Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.