State Bank Of India vs Tanishka Automotives Private Limited

The present Application has been filed by Ms. Ritu Rastogi, Resolution Professional (hereinafter referred to as “RP”/ “Applicant”) for Tanishka Automotives Private Limited, Corporate Debtor, under Sub-section (2) of Section 33 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “Code”) for initiating the liquidation process of the Corporate Debtor, namely Tanishka Automotives Private Limited, and to appoint her (Ms. Ritu Rastogi) being the Resolution Professional, having IBBI Registration No. IBBI/IPA-001/IP-P00204/2017-2018/10393 as a liquidator of the Corporate Debtor.

The submissions made by the Applicant in its Application are summarized hereunder:

The Financial Creditor, i.e., State Bank of India, had filed an Application bearing CP (IB) No.426/CHD/HP/2019 under Section 7 of the Code for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) against the Corporate Debtor. This Tribunal, whilst initiating CIRP against the Corporate Debtor inter alia, appointed the Applicant, namely Ms Ritu Rastogi, as the Interim Resolution Professional (hereinafter referred to as “IRP”) and imposed moratorium under Section 14 of the Code. vide the same Order. A copy of the Order dated 22.12.2022 has been annexed as Annexure A-1 to the Application.

The IRP made a public announcement of the CIRP of the Corporate Debtor on 04.01.2023, inviting submissions of claims by the creditors. The IRP then constituted the Committee of Creditors (hereinafter referred to as “CoC”) consisting of the State Bank of India as the sole Financial Creditor.

In the 1st CoC meeting dated 03.02.2023, a proposal for the appointment of the IRP as RP was approved. The IRP apprised the CoC with regard to the steps taken by the Applicant in the CIRP of the Corporate Debtor. A copy of the minutes of the first CoC meeting dated 03.02.2023 has been annexed as Annexure A-3 to the Application.

The 2nd CoC meeting was convened on 09.03.2023. The CoC members had submitted their approval for the appointment of 2 sets of Registered Valuers for the purpose of conducting the Valuation of all three classes of assets of the Corporate Debtor. The RP had procured the balance sheet for the Financial Year ended 31.03.2016, and thereby provided it to the Registered Valuers. However, as per the Code, the Valuation shall be done from the cut-off date, i.e., CIRP commencement Date. Due to a lack of records/information, the Registered Valuers were unable to conduct the Valuation from the cut-off date, i.e., CIRP Commencement Date. Therefore, the Applicant filed an application under Section 19(2) of the Code against the suspended Directors. A copy of the minutes of the 2nd CoC meeting dated 09.03.2023 has been annexed as Annexure A-4 to the Application.

The RP convened the 3rd CoC meeting on 19.04.2023, wherein the members of the CoC approved the resolution for the issuance of Form G in the matter of the Corporate Debtor with 100% voting share. The Applicant issued Form G dated 07.05.2023 in accordance with the decision of the CoC and in terms of Regulation 36A of the CIRP Regulations. The last date for submission of the expression of interest in the matter of the Corporate Debtor was stipulated as 23.05.2023. The Applicant received an Expression of Interest from one prospective resolution applicant; however, the sole prospective resolution applicant failed to submit a resolution plan within the time specified in the Form G. A copy of the minutes of the 3rd CoC meeting dated 19.04.2023 has been annexed as Annexure A-5 to the Application.

Thereafter, the CoC in the 4th meeting held on 10.07.2023, wherein the Applicant placed the agenda for Liquidation of the Corporate Debtor as the CIRP period was about to expire, but the same was deferred to the next CoC meeting as the approval from the head office of State Bank of India was required. The members of the CoC approved the resolution seeking extension of 30 days beyond 180 days of the CIRP period in the matter of the Corporate Debtor on 04.07.2023. A copy of the minutes 4th CoC meeting dated 10.07.2023 has been annexed as Annexure A-10 to the Application.

Pursuant to the above, the Applicant filed an Application bearing I.A. No. 1624 of 2023 seeking extension of the CIRP period by 30 days before the Adjudicating Authority. The Adjudicating Authority vide Order dated 27.07.2023 directed the Applicant to reconvene the CoC meeting and file a fresh application after obtaining necessary approval from the CoC.

The 5th meeting of the CoC was convened on 05.08.2023. The Applicant apprised the members that the Adjudicating Authority has directed the Applicant to recalculate the CIRP period and place the required agenda for extension before CoC members. The CoC members were further apprised that the 180 days of the CIRP period shall expire on 21.06.2023, and thus, a resolution for extension of the CIRP period by 90 days was passed by the COC members. The Applicant filed an Application bearing I.A. No. 2066/2023 under Section 12A of the Code seeking extension of 90 days beyond 180 days of the CIRP period. The Adjudicating Authority vide Order dated 06.09.2023 allowed and extended the CIRP period by 90 days beyond 180 days. A copy of minutes 5th CoC meeting dated 05.04.2023 has been annexed as Annexure A-13 to the Application.

The RP convened the 6th CoC meeting on 15.09.2023. The Applicant, in terms of the discussion in the previous COC meetings, placed the agenda for liquidation of the Corporate Debtor along with related resolutions in compliance with Regulation 39B, 39C, and 39D of the CIRP Regulations. The CoC member vide voting on a ballot paper, approved the resolution for liquidation with 100% voting share on 18.09.2023. A copy of minutes 6th CoC meeting dated 15.09.2023 has been annexed as Annexure A-16 to the Application.

The Applicant in the 6th CoC meeting dated 15.09.2023 informed the members of the CoC that no resolution plan for the Corporate Debtor had been received till date, despite the extension. After deliberation, the CoC resolved with 100% voting that the Corporate Debtor should be liquidated. The CoC also resolved that Ms. Ritu Rastogi shall be the liquidator in terms of Section 34(1) of the Code, read with Regulation 3(1) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, for the purposes of liquidation of the Corporate Debtor. A copy of the minutes of the 6th meeting, the voting results have been annexed as Annexure A-16 to the Application. A copy of the consent form of Ms. Ritu Rastogi has been annexed as Annexure A-17 to the Application.

Further, the CoC in its 6th meeting dated 15.09.2023, in accordance with Regulations 39B and 39D of the IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016, passed the following resolutions:

In compliance with the direction passed by the Adjudicating Authority vide Order dated 28.04.2025, the Applicant filed an Affidavit vide Diary No. 03209/2 dated 13.05.2025 wherein the Applicant submitted that the Sole Financial Creditor i.e., the State Bank of India has agreed to contribute liquidation cost in case the Liquid assets of the Corporate Debtor are not sufficient to meet the liquidation cost incurred by the Liquidator while carrying out the Liquidation Process in compliance with Regulation 39B(3) of the CIRP Regulations. A copy of the email dated 05.05.2025 submitted by the State Bank of India to the Applicant stating the same has been annexed as Annexure A-2 to the Affidavit.

We have heard the learned counsel appearing on behalf of the Resolution Professional and have perused the relevant material available on record.

It is observed that the present Application has been filed under section 33(2) of the Code for the initiation of the liquidation process of the Corporate Debtor. The CoC consists of a sole member, i.e., the State Bank of India. The Resolution Professional has published Form G on 07.05.2023, but no resolution plan was received, and thereafter, in the 6th CoC meeting held on 15.09.2023, the resolution with the 100% voting share for the Liquidation was passed.

The CoC, in accordance with Regulation 39B, resolved and approved the liquidation cost of Rs 1,50,000/-. Further, the Sole Financial Creditor, i.e., the State Bank of India, has agreed to contribute the liquidation cost in case the Liquid assets of the Corporate Debtor are not sufficient to meet the liquidation cost incurred by the Liquidator while carrying out the Liquidation Process. The CoC resolved that the fee of the Liquidator in the event of Liquidation of IBBI (Liquidation Process) Regulations, 2016 shall be as per Regulation 4(2)(a) Rs. 50,000/- per month during the corporate insolvency resolution process, for the period of compromise or arrangement under section 230 of the Companies Act, 2013 and further resolved that the fee of the Liquidator under Regulation 32 of IBBI (Liquidation Process) Regulations, 2016 or Sale under Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016 shall be as per Regulations 4(2) (b) of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations. Furthermore, no Resolution Plan was received even after publication of Form G. As such, the Application deserves to be allowed.

The Applicant has provided its written consent to be appointed as the liquidator of the Corporate Debtor. However, the Adjudicating Authority vide Order dated 17.01.2024, directed the RP to call for a meeting of the CoC so that CoC member may reconsider their decision to appoint the existing RP as the Liquidator in view of the IBBI Letter.

In compliance with the above Order, an Affidavit was filed vide Diary No. 03209/1 dated 09.02.2024, submitting that the RP convened the 7th meeting of CoC on 31.01.2024, wherein the agenda for appointment of the Liquidator for Corporate Debtor was placed and it was resolved that:-

It is noted that subsection (4) of Section 34 provides that where the Adjudicating Authority passes an order for liquidation of the Corporate Debtor, the Resolution Professional appointed for the CIRP shall act as the liquidator unless replaced by the Adjudicating Authority under the following three circumstances:

The resolution plan submitted by the RP under section 30 was rejected for failure to meet the requirements mentioned in sub-section (2) of section 30; or

The Board recommends the replacement of a RP to the Adjudicating Authority for reasons to be recorded in writing; or

The RP fails to submit written consent.

Thus, Section 34(4)(b) of the Code inter alia provides that the Adjudicating Authority shall replace the RP if the IBBI recommends the replacement for reasons to be recorded and the IBBI has in its letter dated 18.07.2023 (Liq-12011/214/2023-IIBI/840) recommended that an Insolvency Professional other than the RP/IRP may be appointed as liquidator in all the cases where a liquidation order is to be passed henceforth. The liquidator can be appointed from the panel list of IBBI.

Considering the above facts and circumstances of the case and taking into account the guidelines of IBBI dated 18.07.2023, we considered the name of Mr. Rohit Sehgal, having Registration Number IBBI/IPA-001/IP-P00528/2017-2018/10953, email: [email protected], from the panel of the IBBI list is considered for appointment as liquidator. He will file his consent for being appointed as liquidator.

In view of the satisfaction of the conditions provided under section 33 of the Code, the Corporate Debtor, i.e., Tanishka Automotives Private Limited, is directed to be liquidated in the manner as laid down in Chapter III of the Code.

Accordingly, by exercising our power under section 33(2) of the Code we pass the following Orders:-

The Corporate Debtor shall be liquidated with immediate effect as on the date of this Order in the manner provided under Chapter III, Part II of the Code and other relevant rules and Regulations, including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended up to date, enjoined upon him. Accordingly, we allow IA (I.B.C)/2288(CH)2023.

The Moratorium declared under section 14 of the Code shall cease to have effect from the date of the Order of liquidation.

According to section 34(4)(b) of the Code and the letter dated 18.07.2023 of IBBI, we hereby appoint Mr. Rohit Sehgal, having Registration Number IBBI/IPA-001/IP-P00528/2017-2018/10953 as a liquidator of the Corporate Debtor, i.e., Tanishka Automotives Private Limited. The liquidator so appointed shall complete the liquidation process as per the provisions of the Code read with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

All the powers of the Board of Directors, key managerial persons, and the members /partners of the Corporate Debtor, as the case may be, hereafter cease to exist. All these powers henceforth vest with the liquidator.

The personnel of the Corporate Debtor are directed to extend all cooperation to the liquidator as required by him in managing the liquidation process of the Corporate Debtor.

The liquidator's fees shall be in accordance with Regulation 4 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The same shall be paid to the liquidator from the proceeds of the liquidation estate under section 53 of the Code.

Once the liquidation process is initiated, subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. The liquidator has the liberty to institute a suit and other legal proceedings on behalf of the Corporate Debtor with the prior approval of this Adjudicating Authority, as provided in sub-section (5) of section 33 of the Code.

This liquidation Order shall be deemed to be notice of discharge to the officers, employees, and workmen of the Corporate Debtor, except to the extent that the business of the Corporate Debtor continued during the liquidation process by the liquidator.

This Adjudicating Authority directs the liquidator to issue a public announcement stating that the Corporate Debtor is in liquidation. The liquidator will also serve a copy of this order to the various Government Departments, such as Income Tax, GST, VAT, etc., who are likely to have any claim upon the Corporate Debtor, so that the authorities concerned are informed of the liquidation Order timely manner. The liquidator will also provide a copy of this order to the trade unions/employee associations of the Corporate Debtor so that the workmen/employees can also be informed of this liquidation Order through their association.

The Registry is directed to communicate this Order to the concerned Registrar of the Companies, the registered office of the Corporate Debtor, the Resolution Professional, and the liquidator by speed post as well as e-mail within one week from the date of this Order, after completion of all the formalities.

The present Resolution Professional is directed to hand over the relevant documents and control of the Corporate Debtor to the newly appointed Liquidator forthwith.

Accordingly, IA(I.B.C)/2288(CH)2023 in CP(IB)No.426/CHD/HP/2019 is allowed and disposed of.