Renu Bala vs Shree Basant Oils Limited

This application bearing I.A. No. 217/2023 in CP(IB) 504/ALD/2019 has been filed for dissolution of Corporate Debtor under Section 54 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as IBC) praying for the following reliefs:

To put it briefly, the facts of the case are that the Application under section 9 of IBC for initiating CIRP was admitted by this Adjudicating Authority vide order dated 16.01.2020 and Mr. KK Agarwal was appointed as IRP. Later, Mr. Aditya Agarwal replaced Mr. KK Agarwal as RP vide order dated 12.06.2020.

Applicant submitted that the CoC in its 10th meeting held on 13.01.2021 unanimously (with 100% vote share) resolved that Corporate Debtor should be liquidated in accordance with the provisions of the IBC-2016.

Applicant further submitted that on the decision of CoC, an application for liquidation of Corporate Debtor was filed before this tribunal and this Adjudicating Authority passed an order u/s 33 (2) to liquidate the Corporate debtor on 14.12.2021 and Mr. Manish Agarwal was appointed as Liquidator.

Applicant submitted that pursuant to liquidation, public announcement in two newspapers namely, Business Standard (English) and Amar Ujala (Hindi), was issued on 25.12.2021 for invitation of claims.

The specified deadline for submitting claims, as mentioned in the public announcement, was 15.01.2022. Additionally, a copy of the public announcement was uploaded on the Insolvency and Bankruptcy Board of India's website on 27.12.2021.

On 22.12.2021, the Applicant notified the Registrar of Companies in Kanpur, Uttar Pradesh via email about the commencement of Liquidation Proceedings against the Corporate Debtor. The Applicant submitted that the Registrar of Companies, Kanpur subsequently modified the status of the Corporate Debtor from being under Corporate Insolvency Resolution Process to being under Liquidation.

The Applicant submitted that in adherence to Regulation 41(1) of the Liquidation Regulations, 2016, he opened the liquidation account for the Corporate Debtor to collect all funds owed to it. The particulars of the liquidation account are outlined below:

Account Name: Shree basant Oils Limited ii. In Liquidation Account Number: 120000897967 iii. Bank: Canara Bank iv. Branch: SSI, Jail Chungi, Meerut - 250001

The Applicant further submitted that in accordance with Regulation 15(2), (3), (4), and (5) of the Liquidation Regulations, 2016, the Applicant undertook measures to engage professionals for conducting a valuation of the Corporate Debtor's assets. This valuation aimed to determine both the fair value and liquidation value of the Corporate Debtor.

The Applicant submitted that in accordance with the official announcement, he collected claims from multiple creditors of the Corporate Debtor uptil the final submission date. After the verification of the claims, the Stakeholder Consultation Committee of the Corporate Debtor was established. The Applicant has submitted the list of stakeholders to this Tribunal.

The Applicant stated that he had filed the first progress report for the period from January 1, 2022, to March 31, 2022, with this Adjudicating Authority.

The Applicant further states that on April 20, 2022, he convened the 1st meeting of the Stakeholder Consultation Committee (SCC), during which the committee members were informed about the progress made in the liquidation process of the Corporate Debtor.

As per the Asset Memorandum, the following valuers were appointed by Liquidator for valuation of the assets of the Corporate Debtor:

i. Ankit Gupta for Plant and Machinery ii. Ankit Gupta for Securities and Financial Assets iii. Ankit Gupta for Land and Building

Arpit Agarwal for Land and Building

Brahm Pal Bharadwaj for Plant and Machinery vi. Bhavin Patel for Securities and Financial Assets

The Applicant submits that on May 17, 2022, he conducted the second meeting of the Stakeholder Consultation Committee (SCC), during which discussions were held regarding the valuation of the assets of the Corporate Debtor.

Subsequently, on May 28, 2022, the Applicant published an Auction Notice in compliance with Regulation 12 of the Liquidation Process Regulations, 2016. This notice, aimed at realizing assets as per Regulation 32 of the Liquidation Process Regulations, 2016, was published in two newspapers:-

Financial Express (English) ii. Amar Ujala (Hindi)

The last date for the submission of Expression of Interest (EOI) mentioned in the publication was June 9, 2022. A copy of the E-auction Sale Notice dated May 28, 2022, along with newspaper cuttings, has been attached as ANNEXURE A-11 (COLLY) to the instant application.

The Applicant further states that a copy of the E-auction Sale Notice dated May 28, 2022, was uploaded on the website of the Insolvency & Bankruptcy Board of India (referred to as the "Board") on May 30, 2022.

The Applicant averred that the electronic auction (e-auction) was held on June 10, 2022, and was facilitated by a third-party agency on the platform right2vote.in.

On June 10, 2022, bidders actively participated in the auction, vying for the acquisition of the assets listed below. The specifics of these assets, along with their respective reserve prices, are detailed as below:

The Applicant states that the reserve prices were determined based upon the valuation reports provided by the valuers appointed by him.

On June 10, 2022, Lot – 5 received the highest bid of Rs. 20,21,00,000/-, surpassing its reserve price of Rs. 19,96,00,000/-. Consequently, Prodigious Industries Private Limited acquired the entire Plant & Machinery, along with Land & Building of unit-1 & unit-2 (including all vacant land in the company's name), comprising all assets of the Corporate Debtor, at a sum of Rs. 20,21,00,000/-. The e-auction results can be found attached as ANNEXURE A-12 to the instant application.

The Applicant submits that he sent the Letter of Intent to Prodigious Industries Private Limited, the successful bidder in the e-auction process for the consolidated assets of the Corporate Debtor. The successful bidder promptly provided a signed unconditional acceptance to the Applicant.

The Applicant then informed the members of SCC about receiving the full payment from the bidder. As a result, a sale certificate was issued to the successful bidder, and the transfer of possession was then due.

The Applicant stated that the sale proceeds were then distributed among the stakeholders of the Corporate Debtor. The Applicant emphasized that the sale proceeds have been entirely disbursed among the stakeholders following the prescribed waterfall mechanism outlined in Section 53 of the Code.

The Applicant apprised this Tribunal that I.A. 15 of 2023, I.A. No. 126 of 2023 and I.A. No. 127 of 2023 has been filed under Sections 43, 45, and 50 of the Code and are currently pending before this Tribunal. He further clarified that initially, a consolidated application, i.e., IA No. 07 of 2021, was submitted by the Resolution Professional to this Hon'ble Tribunal. By virtue of an order dated 16.12.2022, the Hon'ble Tribunal directed the Applicant to file separate applications. Consequently, the Applicant submitted I.A. No. 15 of 2023, I.A. No. 126 of 2023, and I.A. No. 127 of 2023, all of which are presently pending.

In the 7th meeting of the SCC on 21.03.2023, the Applicant informed the SCC members that following the dissolution of the Corporate Debtor, Union Bank of India, as the lead banker in the SCC, will pursue the outstanding avoidance transaction applications. The minutes of the 7th meeting of SCC dated 21.03.2023 have been attached as ANNEXURE A-13 to the instant application.

The Applicant submitted that Section 54(1) of the Insolvency and Bankruptcy Code, 2016 states as follows:

The Applicant averred that in light of the distribution of the funds realized from the sale of Corporate Debtor's assets, the Applicant was obligated to take steps to close the Corporate Debtor's bank account. This action will be finalized upon the issuance of a dissolution order by this Adjudicating Authority.

Also, in adherence to Regulation 45 of the Liquidation Process Regulations, 2016, the Applicant has prepared a final report before the dissolution application, encompassing a Liquidation Statement of Assets and their realization. The distribution of funds aligns with Section 53 of the Code, 2016. The Compliance Certificate in FORM - H, as per Regulation 45(3) of the Liquidation Process Regulations, 2016, has been enclosed as ANNEXURE A-15 to the application.

The Applicant stated that the liquidation process commenced on 14.12.2021 and the one-year period for its completion concluded on 13.12.2022. Assets were sold and proceeds distributed within this timeframe. However, on 16.12.2022, this Tribunal instructed the Applicant to submit separate applications. Consequently, the Applicant submitted I.A. No.15 of 2023, I.A. No. 126 of 2023, and I.A. No. 127 of 2023, all of which are currently awaiting adjudication by this Tribunal. Union Bank of India, as the lead member of the Stakeholders Consultation Committee as per the meeting on 21.03.2023, will now be pursuing the aforementioned applications. Given these circumstances, the Applicant had requested a 5- month extension in the completion of the liquidation process for the Corporate Debtor.

We have gone through the present Application filed by the Liquidator praying for closure of liquidation process and dissolution of the Corporate Debtor and in terms of Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 45 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. We have heard the Ld. Counsel appearing on behalf of the Liquidator and have also gone through the contents of the present petition.

The dissolution application was submitted after one year had elapsed and the applicant has sought an extension/condonation for the liquidation of the Corporate Debtor. The liquidation began on 14.12.2021 and the one-year deadline for its completion was 13.12.2022. Assets of the Corporate Debtor were sold and proceeds distributed within that timeframe. However, on 16.12.2022, this Tribunal instructed the applicant to file separate applications (preferential, undervalued, and extortionate). Consequently, the applicant filed I.A. No.15 of 2023, I.A. No. 126 of 2023, and I.A. No. 127 of 2023, which are pending adjudication. These applications will now be pursued by Union Bank of India, the lead member of SCC, as per the Stakeholders Consultation Committee meeting dated March 21, 2023. In view of the above, the Applicant has sought an extension of period of 5 months in completion of liquidation process of the Corporate Debtor. The proceeds, if any, would however be distributed as per the waterfall mechanism u/s 53 of the Code.

The Applicant has filed the Final Report and the Compliance Certificate in Form-H as required by Regulation 45(3) of IBBI (Liquidation Process) Regulations, 2016.

This Tribunal was also apprised that Company Petition No-09/ALD/2021, namely, The Dy. Commissioner of Income Tax, Central Circle, Agra v/s Shree Basant Oils Ltd & Ors., in which the Corporate Debtor is listed as a respondent, is currently under consideration before this Adjudicating Authority. The pleadings for this case have been finalized, and the upcoming hearing date is scheduled for 22.02.2024.

However, this order is without any prejudice to the rights of any statutory authority including that of the Income Tax Department, as sought by them under Company Petition No-09/ALD/2021 which is pending adjudication before this Adjudicating Authority.

That in view of the facts and circumstances, since the Applicant submitted that all the assets of Corporate Debtor have been completely liquidated and/ or distributed to stakeholders as the provisions of law and there is nothing left to be further liquidated.

In view of the facts and circumstances, the Applicant had prayed that the Corporate Debtor may be dissolved under Section 54 of IBC, 2016.

We have heard the submissions. Here, it is worthwhile referring to Section 54 of IBC, 2016 and Regulation 45 IBBI (Liquidation Process) Regulations, 2016:

That from the conjunct reading of the above provisions, this Adjudicating Authority is required to see that whether the assets of the Corporate Debtor are completely liquidated or not. In the instant case the Liquidator has furnished his Final Report and Form-H.

Since in the instant case as discussed above, all the assets of the Corporate Debtor have been liquidated and all the requirements of Regulation 45 of IBBI (Liquidation Process) Regulations, 2016 have been fulfilled, therefore, we are inclined to allow the present Application under Section 54(2) of the IBC, 2016.

Accordingly, there being no other impediment, the present Application namely, I.A. No.217 of 2023 is allowed and the Corporate Debtor is ordered to be dissolved with immediate effect.

As the I.A. No.217 of 2023 is disposed of allowing dissolution of the Corporate Debtor, consequently CP (IB) No. 504 of 2019 also stands disposed of.

In the result, in exercise of the powers conferred on the Adjudicating Authority, under Section 54 of the Code, the instant Application bearing I.A. No.217 of 2023 and CP (IB) No. 504 of 2019 are hereby disposed of with the following directions:

The Corporate Debtor, namely, Shree Basant Oils Limited is dissolved, with immediate effect;

The Registry is directed to forward a copy of this Order to the Registrar of Companies Kanpur, within a period of two weeks from the date of receipt of this order, for further necessary action as prescribed under Law;

The Ld. Liquidator is directed to forward copies of this Order to all other Statutory Authorities connected with the affairs of the Company, for further necessary action as prescribed under Law

The delay of 5 months in completion of the liquidation process of the Corporate Debtor is condoned.

With this, the instant I.A. No. 217 of 2023, and Petition bearing CP (IB) No. 504 of 2019 also stand disposed of accordingly.