Religare Finvest Limited vs Venkateshwara Capital Management Ltd.

Per Shri Madan B. Gosavi

Religare Finvest Ltd. - the Financial Creditor filed this Petition under section 7 of the Insolvency & Bankruptcy Code, 2016 (in short, I&B Code) against Venkateshwara Capital Management Limited - Corporate Debtor to start Corporate Insolvency Resolution Process (in short, "CIRP") of the Corporate Debtor, as the Corporate Debtor allegedly committed default in paying the Financial debt of Rs. 22,97,82,021/- (Rupees Twenty-Two Crore Ninety Seven Lakh Eighty-Two Thousand and Twenty One Only) (together with interest).

This authority vide order dated 05.03.2019 admitted the corporate debtor in CIRP. Mr. Shashi Agarwal, having registration no. IBBI/IPA-001/IP-P00470/2017-2018/10813 was appointed as the IRP. IRP proceeded with the CIRP. On 08.03.2019, he made public announcement of CIRP of the corporate debtor publishing notice in "Financial Express" and "Aajkaal". He thereby called upon the creditors of the corporate debtor to submit their claims with the proof. In pursuant to the announcement, IRP received claim from one financial creditor i.e. applicant and no claim from any Operational Creditor had been received. IRP formed the Committee of Creditors consisting of one Financial Creditor having 100% voting share. It is seen from the record that the Corporate Debtor went on shifting the registered office form one place to another place. IRP did not receive any balance sheet, financial status, information of the assets and liabilities of the Corporate Debtor. RP filed an application under Section 19 IBC for direction upon the Corporate Debtor for cooperating it for successful completion of the CIRP. That application was allowed. In spite of direction from this Authority, it appears that the IRP did not get required cooperation from the Corporate Debtor. Meantime CoC confirmed his appointment as the RP.

During 270 days period of CIRP, CoC held four meetings. It was found by the CoC that the directors and officers of the Corporate Debtor had committed some fraudulent/under-valued transaction about the assets of the Corporate Debtor. Hence, IRP had file application under Section 43,66,69 of IBC, 2016 against them. At this stage, we are not expressing any opinion about this aspect. Be that as it may. Fact remain on record is that for want of requisite information about the assets and liabilities of the Corporate Debtor, the RP could not prepare information memorandum. Resultantly, the RP did not publish notice calling upon Expression of Interest/ resolution plans from perspective resolution applicants. It is seen from the record that from the above sequence, RP and CoC did not receive any resolution plan. CIRP period of 270 days completed today itself. We were told by the RP that last CoC meeting is being held today. We do not know whether CoC pass formal resolution recommending the Liquidation of the Corporate Debtor. We also found from the final report of the RP that CoC did not attend proposed meeting dated 23.09.2019. It appears to us that members of CoC was not interested to proceed with CIRP in an effective manner. Since, CIRP period of 270 days completing today, we do not have before us the resolution plan to resolve insolvency of the Corporate Debtor. Section 33(1) of IBC, 2016 provides that if Adjudicating Authority does not receive resolution plan under Section 30(6) of IBC, 2016, it shall pass order requiring the Corporate Debtor to be liquidated. We invoke in our jurisdiction under Section 33(1) of IBC and pass the order of liquidation of the Corporate Debtor.

In this case, RP Mr. Shashi Agarwal showed his inability to work as the Liquidator. Hence, we replace him by some other insolvency professional as contemplated under Section 34(4) of the IBC, 2016. We pass the following order.

Let the certified copy of the order be issued upon compliance with requisite formalities.