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Judgment
ORDER
Per: Harish Chander Suri, Member (Technical)
This court convened via video conference today.
This is an application filed by Mr. Ajay Kumar Agarwal, the Resolution Professional (RP) seeking liquidation of RDH Technologies Private Limited, the Corporate Debtor, on the ground that no Resolution Plan was received by him.
This Adjudicating Authority vide its order dated 28.08.2019 on a Petition filed by Oriental Bank of Commerce, the financial creditor under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter, the Code) directed initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appointed Mr. Ajay Kumar Agarwal as the Interim Resolution Professional (IRP).
In terms of regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, a public announcement in Form ‘A’ was made by the IRP on 31.08.2019 in Financial Express (English) and Aajkal (Bengali) of Kolkata edition of the said newspapers, fixing 11.09.2019 as the last date for submitting the claim.
The members of the suspended Board of Directors of the Corporate Debtor had preferred an appeal against this Adjudicating Authority’s order dated 28.08.2019. The Hon’ble National Company Law Appellate Tribunal (hereinafter, NCLAT) vide order dated 11.09.2019, directed the Applicant herein not to constitute the Committee of Creditors (CoC). On 13.11.2019, the Hon’ble NCLAT, in modification of the earlier order, permitted the Applicant herein to constitute the CoC and continue with the CIRP.
Pursuant to the public announcement made, the IRP received claims from various financial and operational creditors of the Corporate Debtor. Upon collation of these claims, the IRP constituted the CoC and filed the certificate of the constitution of CoC on 18.11.20219 and a certificate of reconstitution of the CoC on 18.05.2020.
A total of ten CoC meetings took place over the course of the CIRP period. In the first meeting of CoC held on 25.11.2019, the IRP was confirmed as the RP. The same was intimated to this Adjudicating Authority and recorded in the order dated 10.12.2019. In the second CoC meeting held on 27.12.2019, a resolution was taken to appoint two Registered Valuers, viz., Adroit Valuation Services Private Limited and Rajkamal Saraogi & Others to determine the fair and liquidation value of the Corporate Debtor.
Invitation for Expression of Interest (hereinafter, EoI) under section 25(2)(h) was published in Form ‘G’ on 08.01.2020, in Financial Express (English) and Dainik Statesman (Bengali) newspapers, fixing the last date for receipt of EoI as 23.01.2020. The RP did not receive any EoI pursuant to the said publication, therefore, in the third CoC meeting, it was resolved that the Form ‘G’ be re-published. Accordingly, on 13.02.2020, Form ‘G’ was re-published in Financial Express (English) and Aajkal (Bengali) newspapers fixing the last date for receipt of EoI as 27.02.2020.
Since there was a stay on the formation of CoC by the order of Hon’ble NCLAT, an application bearing CA (IB) No.127/KB/2020, seeking exclusion of that period, amounting to forty-nine days, was filed by the RP. The said application was allowed by this Adjudicating Authority on 22.01.2020.
In the meantime, 180 days’ Corporate Insolvency Resolution Process (CIRP) period had expired. Therefore, one of the CoC members namely, Swara Technology Private Limited, filed an application bearing IA (IB) No.795/KB/2020 praying for extension of the CIRP period. The prayer was allowed vide order dated 04.02.2021.
Ascot Realty Private Limited and Premsagar Traders Private Limited submitted their EoIs in response to the republication made in Form ‘G’. The RP issued a provisional list of prospective Resolution Applicants on 07.03.2020. However, on 04.07.2020 Ascot Realty Private Limited withdrew its EoI, and Premsagar did not submit its non-disclosure agreement within the specified time. Resultantly, the RP did not receive any Resolution Plan for the Corporate Debtor.
Therefore, the RP republished Form ‘G’ on 25.02.2021 fixing 12.03.2021 as the last date of receipt of EoIs in Financial Express (English) and Aajkal (Bengali) newspapers.
Despite the republication of Form ‘G’ twice, the RP did not receive any resolution plan till date. As per the order dated 04.02.2021, the extended CIRP period of the Corporate Debtor was to be over on 04.05.2021. Both these facts were brought to the notice of the CoC in its tenth meeting held on 03.05.2021.
The agenda for liquidation of the Corporate Debtor was discussed and put up for voting, however, the CoC members upon discussion abstained from voting on the said agenda, therefore, no resolution to liquidate the Corporate Debtor was passed.
As it had been coming to an end, on 04.05.2021 the extended CIRP period expired. In the absence of any resolution plan received by the RP and the elongated hourglass of CIRP period having been emptied, the RP has approached this Adjudicating Authority under section 33(1)(a) of the Code praying for liquidation of the Corporate Debtor.
The RP has also expressed his inconvenience in continuing as the liquidator to the Corporate Debtor, in case an order of liquidation of the Corporate Debtor is passed.
We have considered the submission made by the ld. Counsel appearing for the Applicant and perused the record.
This is a case where no Resolution Plan was received even after Form ‘G’ was published thrice. Section 33(1)(a) of the Code enjoins the Adjudicating Authority to pass an order for liquidation of the Corporate Debtor where the RP, before the expiry of the CIRP period or maximum period permitted for completion of CIRP does not receive a Resolution Plan.
This Bench, therefore, hereby orders as follows: -
a. IA No.526/KB/2021 filed by Ajay Kumar Agarwal, RP of RDH Technologies Private Limited, the Corporate Debtor, is allowed and the Corporate Debtor is ordered to be liquidated in terms of section 33(1) of the Code;
b. Mr. Umesh Poddar, (Reg. No. IBBI/IPA-001/IP-P01912/2019-2020/12962, mobile no. 9874444660, email id: [email protected] is hereby appointed as liquidator as provided under section 34(4)(c) 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.
c. The Liquidator shall initiate the liquidation process as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
d. Public Notice shall be issued in the same newspapers in which the advertisements were issued earlier, i.e., Financial Express (English) and Aajkal (Bengali) of Kolkata edition of the said newspapers stating that the Corporate Debtor is in liquidation.
e. All the powers of the Board of Directors and 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.
f. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator as required by him in managing the liquidation process of the Corporate Debtor.
g. 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 the liberty to the liquidator to institute the suit or other legal proceeding on behalf of the Corporate Debtor with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Code read with its proviso.
h. The RP had also submitted that an application bearing IA (IB) No.785/KB/2020 has been filed under sections 43, 66, 70, 71, 72 and 73 of the Code which is pending adjudication of this Adjudicating Authority. There is no embargo under the law in continuing application of this nature during the liquidation of the Corporate Debtor by the liquidator. The application bearing IA (IB) No.785/KB/2020 shall be heard in the usual course.
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.
j. In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, Kolkata, 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, Kolkata.
The application bearing IA No.526/KB/2021 shall stand disposed of per the above directions.
CP (IB) No. 1671/KB/2018 to come up for filing of a periodical report on 14.02.2022.
The Registry is directed to send e-mail copies of the order forthwith to all the parties and their ld. Counsel for information and for taking necessary steps.
A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities.