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Judgment
Per: SANJIV JAIN,MEMBER (JUDICIAL)
This application under Section 54 of the Insolvency & Bankruptcy Code, 2016 (in short “IBC”) read with Regulation 45 of the IBBI (Liquidation Process) Regulations, 2016 and Rule 11 of NCLT Rules, 2016 has been filed by the Applicant/Liquidator of M/s. Energex Systems India Private Limited for an order of dissolution of the Corporate Debtor and discharge of the Applicant.
The facts relevant for the disposal of the application are that this Tribunal vide order dated 27.01.2019 had admitted the application bearing No.IBA/676/2019 filed under Section 9 of IBC, 2016 by M/s. Anju Electricals (Operational Creditor) against the Corporate Debtor M/s. Energex Systems India Private Limited for initiation of Corporate Insolvency Resolution Process ("CIRP") and declared the moratorium by appointing Interim Resolution Professional ("IRP"). Subsequently, the Committee of Creditor ("CoC") by its 1st meeting dated 09.10.2019 appointed the Applicant as the Resolution Professional to carry out the CIRP. In the 2nd CoC meeting held on 02.03.2020, it was decided to liquidate the Corporate Debtor with 100% voting. Subsequent thereto, an order for liquidation was passed on 27.01.2021 IN IA/976/IB/2020.
The Applicant caused the public announcement informing commencement of the liquidation and called the claims by making publications in newspapers in circulation in Chennai and fixed the last date for submission of claims as 02.03.2021 (Annex-2). The Applicant received four claims amounting to Rs.26.48 Lakhs out of which, CIRP cost claim was Rs.1.45 Lakhs. All the four claims were admitted against which, none of the claimants preferred an appeal under Section 42 of IBC, 2016. A Preliminary Report was submitted to the Tribunal as Annex-3. List of Stakeholders was filed with the Tribunal on 15.04.2021 and public notice was published in the IBBI website on 14.03.2021. Thereafter, the Stakeholders Consultation Committee (“SCC”) was constituted. Asset Memorandum was prepared which is placed as Annex-5. Two Registered Valuers were appointed in accordance with Regulation 35(2) of IBBI to determine the realisable value of the assets and other movables of the Corporate Debtor. Since the ownership and possession of the building did not vest with the Corporate Debtor, it was excluded from liquidation estate of the Corporate Debtor. Valuation Report summary is placed at Annex-6. During process, it was found that the Corporate Debtor under liquidation did not have any debtors for realisation nor have the cash balances in the books of accounts. The old equipments/spare parts etc. were valued by the Registered Valuers for Rs.3.25 Lakhs.
Therefore, e-auction was conducted by the Liquidator on 15.05.2021 where six persons participated. M/s. Sai Enterprises offered the highest bid for Rs. 7,65,000/-. It was declared as successful bidder and thereafter, the bidder deposited the amount of Rs.7,65,000/- in the account of the Corporate Debtor with Bank of Baroda. Sale Certificate is placed as Annex-8. After adjustment of liquidation costs and CIRP costs, the amount payable to the claimants was calculated as Rs.5,33,219/- i.e. 20.13% of the total admitted claim value of Rs.26.48 Lakhs. All the claimants submitted their acceptance to such settlement at Annex-9. The liquidation expenses incurred were calculated as Rs.0.86 Lakhs.
It is stated that after payments of all the liquidation expenses, no amount is left with the Liquidator pending for distribution to the stakeholders. Bank statement has been placed at Annex-10 along with the receipts and payments duly audited by the Chartered Accountant as Annex-11. A report to this effect has been filed in Form-H (Compliance Certificate) under Regulation 45(3) of IBBI Regulations, 2016.
We have heard Ms. Rajalakshmi Varadarajan, Applicant/Liquidator in person and perused the written synopsis and the documents filed with the application.
The Applicant submits that the sale proceeds were duly distributed in accordance with Section 53 of the Code after meeting out the CIRP and liquidation cost. She further submits that she has taken steps for closure of the Corporate Debtor’s bank account. She has not found any transactions that required any avoidance applications nor there are any pending proceedings of litigation against or on behalf of the Corporate Debtor.
A perusal of record reveals that after the initiation of process of liquidation, two Registered Valuers were appointed who assessed the liquidation value of uncertified boiler and scrap as Rs.3,25,000/-. Assets were put to e-auction and the amount realised against the e-auction was Rs.7,65,000/- which was transferred in the Liquidator’s account on 22.12.2021. The realisation is reproduced as under:
| Sl.No. | Assets | Mode of Sale | Estimated Liquidation Value | Realisation amount (In Rs.) | Date of Transfer into Liquidation Account |
|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) |
| 1 | Uncertified Boiler with other scraps | e-Auction | Rs.325000 | Rs.765000 | 22nd Dec 2021 |
The realised amount was accordingly distributed and tabulated as under :
| Sl. No. | Stakeholders under section 52 and 53(1) | Amount claimed | Amount Admitted | Amount Distributed | Amount Distributed to the Amount Claimed (%) | Remarks |
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | (7) |
| 1 | Realization of Security Interest | 0 | 0 | 0 | 0 | No claim received |
| 2 | CIRP & Liquidation Cost [Sec.53(1)(a)] | 231781 | 231781 | 231781 | 100% | |
| 3 | Workmen’s Dues [Sec.53(1)(b)(i)] | 0 | 0 | 0 | 0 | No claim received |
| 4. | Debts of Secured Creditors [Sec.53(1)(b)(ii)] | 0 | 0 | 0 | 0 | No claim received |
| 5. | Wages and Unpaid dues to Employees [Sec.53(1)(c)] | 0 | 0 | 0 | 0 | No claim received |
| 6. | Debts of Unsecured Financial Creditors [Sec.53(1)(d)] | 0 | 0 | 0 | 0 | No claim received |
| 7. | Government Dues + Amount Unpaid following Enforcement of Security Interest [Sec.53(1)(e)] | 0 | 0 | 0 | 0 | No claim received |
| 8. | Any remaining Debts and Dues [Sec.53(1)(f)] | 2648329 | 2648329 | 533219 | 20.13% | 4 Operational Creditors claimed and settled |
| 9. | Preference Shareholders [Sec.53(1)(g)] | 0 | 0 | 0 | 0 | |
| 10. | Equity Shareholders [Sec.53(1)(h)] | 0 | 0 | 0 | 0 | |
| Total | 2880110 | 2880110 | 765000 |
The record reveals that there were only 4 Operational Creditors/claimants who had claimed the amount and settled against the realisation for a total sum of Rs.5,33,219/- i.e., 20.13% of the amounts claimed. The CIRP costs and liquidation costs were duly adjusted and the amount realised was fully paid up to all the stakeholders. The documents placed duly corroborate the information contained in Form-H (Compliance Certificate). There is no claim of any statutory authorities. It has also been mentioned in Form-H that the Corporate Debtor is not in operation for 5 years. The amount has been distributed to all the stakeholders as per Section 53 of the Code.
From the record, it is clear that the liquidation process has been conducted as per the timeline indicated in Resolution 47 and there was deviation qua non-compliances with the provisions of IBC (Regulations) made thereunder of the circulars issued from time to time. The Liquidator has since closed the bank account on 13.12.2022.
From the averments made in the application, the Compliance Certificate and the Final Report submitted in Form-H by the Applicant, it is found that the Corporate Debtor has been completely liquidated. In these circumstances, an order for dissolution is to be passed by the Tribunal under Section 54 of the Code.
Accordingly, we order dissolution of the Corporate Debtor M/s. Energex Systems India Pvt. Ltd. The Liquidator is directed to forward a copy of this order to the RoC concerned and also to IBBI for its records and for updating the status of the Corporate Debtor on the MCA Master Data within a period of 7 days from the date of this order.
IA(IBC)/615(CHE)/2022 stands allowed and disposed off.