Subramaniam Aneetha vs Bhuvan Kumar

Per: R. VARADHARAJAN, MEMBER (JUDICIAL)

MA/398/2019 is an Application filed by the Resolution Professional of the Corporate Debtor viz. M/s. GKK Exports Private Limited under Section 19(2) of Insolvency and Bankruptcy Code (IBC), 2016 seeking thereof to issue directions to the Respondent to extend their assistance and co-operation by furnishing the necessary documents / records / information to the Applicant in order to manage the affairs of the Corporate Debtor, so as to carry out her duties as the Resolution Professional as mandated under the IBC;

MA/1400/2019, is an Application filed by the Resolution Professional under Section 12(2) of IBC, 2016 seeking thereof to pass an order excluding 238 days from the Corporate Insolvency Resolution Process (CIRP) which has been lost in the litigation and also to extend the period of CIRP for a further period of 90 days as per the Resolution passed by the CoC in 08.11.2019.

IA/221/2020, is an Application filed again by the Resolution Professional under Section 12(1) and 12(2) of IBC, 2016 seeking thereof to pass an order condoning the delay of 88 days in filing the Liquidation Application, which ought to have been filed on the expiry of 270^th day of the CIRP.

IA/222/2020 is an Application filed by the Resolution Professional under Section 33(2) read with Section 60(5) of IBC, 2016 seeking thereof to liquidate the Corporate Debtor and to appoint the Application as the Liquidator.

All the above noted applications are disposed of by virtue of a common order.

Brief facts of the case, shorn of unnecessary details are as follows;

Heard the submissions made by the Learned Counsel for the Resolution Professional. Eventhough the CIRP in relation to the Corporate Debtor was initiated as early as on 01.03.2019, as on date it is seen that the CoC has convened only three meetings due to the non cooperation from the part of the Directors whose power stood suspended. In MA/398/2019, which is a Section 19(2) of IBC, 2016 Application, the Respondent has filed an Affidavit stating thereon that the operations of the Company has been shut down as of 2009 - 2010 and as such the records maintained in respect of the Company were available only until the said period. Further, it has been stated that the Secured Creditor viz. Union Bank of India, has taken possession of the Registered Office of the Company under Section 14 of the SARFAESI Act and as such all the records that had been maintained by the Corporate Debtor until such time, were not handed over to the Corporate Debtor.

In reply to the said contentions, the Union Bank of India has filed its reply and has stated that no such record was found in the premises at the time of taking possession by the Financial Creditor and also produced a copy of the inventory which contains the details of the movable items found in the premises of the Corporate Debtor. Under the said circumstances, this Tribunal vide order dated 05.02.2020 directed the suspended Director Mr. MSG Bhuvan Kumar to be present on the next date of hearing. However on 24.02.2020, the suspended Director of the Corporate Debtor was present and undertook to co-operate with the IRP. Thereafter, the matter could not be heard due to the Covid – 19 pandemic coupled with attendant lockdown imposed by the Central / State Governments.

In the meantime, the MA/1400/2019 was filed by the Resolution Professional before this Tribunal on 02.12.2019 by stating thereof that due to the non cooperation of the suspended Director, the RP has no data to prepare the Information Memorandum as required under Section 29 of IBC, 2016 r/w Regulation 36 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and has stated that a total of 270 days has been lost due to non-availability of the records and due to the pendency of MA/398/2019. Thus, the RP has sought for exclusion of 238 days and also to extend the CIRP for a further period of 90 days. However, when the said Application came up for hearing, this Tribunal vide order dated 17.12.2019 directed the RP to issue notice of this Application to the CoC members and also directed the CoC member to respond to the said Application.

Thereafter, the RP filed IA/221/2020 before this Tribunal on 21.02.2020 seeking to condone the delay of 88 days in filing the Liquidation Application, which ought to have been filed before the expiry of 270^th day of CIRP, however the same has been filed with a delay of 88 days. However, for the reasons stated in the said Application, IA/221/2020 seeking to condone the delay of 88 days in filing the Liquidation Application stands allowed.

IA/222/2020 is an Application filed by the Resolution Professional seeking for liquidation of the Corporate Debtor. It is seen from the records that the CoC in its third meeting held on 03.01.2020 as unanimously passed a resolution to liquidate the Corporate Debtor, which is as follows;

Further, in relation to the fees to be paid to the Liquidator, the CoC has resolved to pay a sum of Rs.1,00,000/- per month to the Liquidator as required under Section 33C of the IBBI (Liquidation Process) Regulations, 2016 and also the estimated Liquidation cost as stipulated under Regulation 39B of the BBI (Liquidation Process) Regulations, 2016 is arrived at Rs. 7.20 Lakhs.

As to the present case, it is also to be seen that the CoC in its third meeting itself has decided to liquidate the Corporate Debtor, even before preparation of the Information Memorandum, since the Corporate Debtor has shut down its operations since 2009 and also due to the non availability of sufficient documents to the RP for the purpose of preparation of Information Memorandum. At this juncture, it is pertinent to point out here that, by virtue of the Insolvency and Bankruptcy (Amendment) Act, 2019 (Act No.26 of 2019) an Explanation to sub - section (2) of Section 33 of IBC, 2016, was inserted, which came into force on 16.08.2019, in and by which, it has been stated in the said Explanation that the Committee of Creditors may take the decision to liquidate the Corporate Debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.

Further, it is seen from the record that the Resolution Professional has filed Form AA dated 03.01.2020, wherein she has given her written consent to act as the Liquidator of the Corporate Debtor and the same is placed at Page 17 as Annexure -C to the typed set filed along with IA/222/2020. In the circumstances, Ms. Subramaniam Aneetha is appointed as the Liquidator in relation to the Liquidation proceedings of the Corporate Debtor, which is presently under CIRP.

In view of the facts and circumstances recorded by the Resolution Professional in IA/222/2020 and since, no Resolution Plan has been received by this Authority under Sub-section (6) of Section 30 of the I&B Code, 2016, before the expiry of the maximum period of CIRP, in exercise of powers conferred under Sub-Clauses (i) (ii) and (iii) of Clause (a) of Sub-Section (1) of Section 33 of the I&B Code, 2016, this Authority proceeds to pass the Liquidation Order as follows:-

Accordingly IA/222/2020 stands disposed of with the above said terms. Since, the Corporate Debtor is ordered for Liquidation the MA/398/2019 and MA/1400/2019 stands closed. In relation to IA/221/2020, as already stated in para supra, the same stands allowed.