Sudhir Kumar Goel & Anr. vs M/s Shashi Oils and Fats Pvt. Ltd. (In liquidation) & Ors.

“17.

Further compliance certificate in Form-H as per Regulation 45(3) of Liquidation Process Regulations, 2016 has also been annexed as Annexure A-23 of the present application. Thus, the applicant has complied with all the provisions of the Code and Regulation made thereunder.

18.

After hearing the learned Counsel for the Liquidator and perusing the material available on record, this Tribunal observed that the company has been completely wound up and its assets have been completely liquidated. Hence, the proposed dissolution is not going to affect adversely to its shareholder or creditors and nor it is contrary to the provisions of law.

19.

Hence, considering the above facts and circumstances of the case, this Adjudicating Authority is of the opinion that the present petition deserves to be allowed in terms of its prayer clause.

20.

Consequently, in Adjudicating Authority in exercise of the power conferred to it under Sec 54 of IBC, 2016 orders and direct that the company “Shashi Oils & Fats Pvt. Ltd.” shall stand dissolved from the date of its order and thus the liquidator stands relieved.

21.

The liquidator and registry is further directed to communicate a copy of this order to the Registrar of Companies (where the registered office of the company is situated), IBBI, New Delhi and other Statutory Authorities for necessary information”.

“It has been brought to the notice of this Court that the Company (Shashi Oils & Fats Pvt. Ltd.) has been dissolved vide order of this tribunal dated 15.07.2021”.

List of Dates

“2.

Respondent herein was appointed as the liquidator of Corporate Debtor, Shashi Oils and Fats Pvt. Ltd. by the Adjudicating Authority vide its order dated 21.01.2020, which was received by the Answering Respondent on 22.01.2020.

3.

That pursuant to the appointment, the Answering Respondent in compliance of Section 33(b) (ii) of the Code read with Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016(herein after referred to as (“Liquidation Regulations”) made a public announcement on 25.01.2020 in Form B in the two newspapers (English and Hindi), wherein the last date for submission of claims was stipulated as 20.02.2020 i.e. 30 days from the liquidation commencement date.

4.

That in compliance of the order dated 20.01.2020 passed by the Adjudicating Authority, the Answering Respondent also intimated the ROC, Kanpur by filing Form No. INC-28, thereby the status of the company was changed from “Active- Non Compliant” to “Under Liquidation” on the portal of MCA.

5.

Respondent vide letters dated 12.02.2020 also intimated various other authorities such as Department of Trade & Taxes, District Muzaffarnagar, U.P and Income Tax Department, Khatauli, District Muzaffarnagar, U.P, about the initiation of Liquidation Proceedings in the matter of M/s Shashi Oils and Fats Pvt. Ltd. Copies of Letters dated 12.02.2020 issued by the Liquidator.

6.

On 14.02.2020, the Answering Respondent received a copy of proposal dated 10.02.2020 from ASREC (India) Ltd., the sole secured creditor (‘Respondent No. 2 herein’) regarding One Time Settlement (OTS) agreed between Mahadev Rice Mills (‘Respondent No.3 herein’) and Promoters of Corporate Debtor with Respondent No. 2 vide said proposal. Subsequently, Answering Respondent had obtained legal opinion from an advocate regarding the Respondent No. 2 can settle with the Promoters of the Corporate Debtor by accepting the One Time Settlement against the secured assets to be realized under Section 52 of the IBC, 2016 during liquidation process and other related matters arising out of the said OTS proposal.

7.

The Respondent No. 2 being the sole secured financial creditor filed its claim for Rs. 49,61,07,301 in prescribed Form-D vide email dated 20.02.2020 and also through Courier on 21.02.2020. It is pertinent to note that the security interest of Respondent No. 2 on the assets of the Corporate Debtor was not relinquished by it.

8.

The Appellants and Respondent No. 3 defaulted in making the payment within the time period to the Respondent No. 2, consequent to which, the Respondent No. 2 issued OTS Cancellation letter dated 07.08.2020 upon the Appellants and the Respondent No. 3, which was also received by the Answering Respondent on the same date.

9.

The cancellation of the proposed OTS settlement, the Respondent No. 2, vide communication dated 07.08.2020, informed the Answering Respondent regarding the relinquishment of their security interest on the assets of the Corporate Debtor and accordingly, the Answering Respondent made the assets of the Corporate Debtor part of the liquidation estate in terms of Section 36(3) (g) of the Code and Regulation 37(1) of the Liquidation Regulations, 2016.

10.

Details of Various stakeholders included in this SCC are as follows:

Class of Creditor	Number of Representatives
Secured financial creditors, who have relinquished their security interests under Section 52	Number of creditors in the category, subject to a maximum of 2
Unsecured financial creditors	Number of creditors in the category, subject to a maximum of 1
Workmen and employees	1
Governments	1
Operational creditors other than workmen, employees and Governments	Number of creditors in the category, subject to a maximum of 1
Shareholders or Partners, if any	1

14.

Respondent made a public announcement dated 12.08.2020 in the newspaper in term of Regulation 31 (2) read with regulation 12 (3) providing the list of stakeholders as filed with the Adjudicating Authority.

15.

The Answering respondent approached the ICICI Bank Limited for opening a liquidation account of the Corporate Debtor as is required under Regulation 41(1) of the Liquidation Regulations. The liquidation account of the Corporate Debtor was opened with some delay due to the prevalent pandemic situation and the details of the Bank account was provided by the Bank.

16.

Respondent issued notices dated 07.08.2020 upon the members of SCC for their 1 meeting, which was held on 11.08.2020, wherein the members were apprised about the sale of the assets of Corporate Debtor. After discussion and deliberations, the SCC with 100% voting share decided that the assets (Land & Building and Plant & Machinery) of the Corporate Debtor to be put to e-auction at a reserve price of Rs. 3.75 crores against the Liquidation Value of Rs.3.13 Crores (approx.).

17.

Respondent issued public notices for e-auction sale to be conducted on 12.08.2020 for the assets for sale of assets of corporate debtor on “as is where is, as is what is, whatever there is and without recourse basis” in two newspapers (English and Hindi).

18.

It is further submitted that, all information/ documents with respect to the e-auction process and the list of assets of Corporate Debtor was uploaded on the website of agency conducting E-Auction.

19.

Two prospective bidders i.e. HSA Traders (Proprietor Mr. Furqan Ahmed) and Hierank Sugar Industries Pvt. Ltd. showed their interest and also deposited the requisite EMD amount i.e. Rs. 37.50 Lakhs being 10% of the reservice price along with relevant Bid documents, for participating in e-auction process.

20.

It is further submitted that on the date of e-auction i.e. 29.08.2020, upon closure of the e-auction window, the successful bidder with the highest bid was declared in terms of the E-Auction Process Document.

21.

It is submitted that the Answering Respondent communicated the declaration of successful bidder to HSA Traders (Proprietor Mr. Furqan Ahmed) vide email dated 29.08.2020. As per the payment schedule mentioned in the E-auction Process Document, the successful bidder was required to complete 25% payment of the sale consideration within 3 days of e-auction. Accordingly, the Successful Bidder deposited another Rs. 57 Lakhs in the Bank account of the Corporate Debtor maintained with ICICI Bank. The Balance amount was to be paid within 30 days of the sale or within 90 days of the sale (with 12% interest) in terms of the provision of the Code.

22.

It is further submitted that the remaining sale consideration was duly paid by the Successful Auction Purchaser till 25.09.2020 along with an amount of Rs. 18.90 lakh towards GST. Pursuant whereof, a sale certificate dated 28.09.2020 was issued to the Successful Auction Purchaser and a possession certificate was received from the Successful Auction Purchaser after the schedule assets were handed over to the buyer on 01.10.2020. Copy of the Sale Certificate issued by the Answering Respondent to the Successful Auction Purchaser and Possession Certificate issued by the Successful Auction Purchaser —-HSA Traders to the Answering Respondent is annexed herewith.

23.

Respondent cancelled the contract with security agency being VR India Security Services w.e.f. 01.10.2020.

24.

It is further submitted that post receipt of full sale proceeds towards sale of all assets of Corporate Debtor under the liquidation process conducted in accordance with provisions of the Code and Regulations made thereunder, the Answering Respondent took the undertaking from the sole secured creditor Asrec (India) Ltd. that in the event of any orders being passed by any Court / Tribunal requiring the Answering Respondent to distribute the proceeds in any way different than as provided above or if otherwise any excess payment, if any has been made to Asrec (India) Ltd. in terms of Section 53(1)(b)(ii), then Asrec (india) Ltd. shall contribute such amount as required to execute the orders as above and also refund the said excess amount, if any to the Answering Respondent forthwith on receipt of notice from the Answering Respondent for the distribution as per the Insolvency and Bankruptcy Code, 2016 or even otherwise directed by any Court of Law. Furthermore, the sole financial creditor shall keep the Answering Respondent being the Liquidator will not be held responsible in the event such distribution to them is in excess or otherwise.

25.

Respondent released an amount of Rs.3.50 Crores to them on 29.09.2020. The Answering Respondent also deducted his professional fees of Rs.10 Lakh plus applicable GST from the sale proceeds, which was decided as per agreement with Asrec India Ltd.

27.

In the interregnum two applications being I.A. 206 of 2020 and I.A. 198 of 2020 were filed by the Appellants herein before the Adjudicating Authority for seeking stay of auction to be held by the Answering Respondent on 10.09.2020 and for seeking directions from the Adjudicating Authority to not to confirm the e-auction sale of the assets of the Corporate Debtor conducted by the Answering Respondent on 29.08.2020. Thereafter, an application being I.A. 201 of 2020 was filed by the Appellants herein seeking urgent hearing of LA. 198 of 2020, however the same was dismissed as not being maintainable.

28.

The Successful Auction Purchaser also filed an application being I.A. 355 OF 2020 for seeking directions against the Appellants to restrict them from interfering in the peaceful possession of the assets purchased by the Successful Auction Purchaser, which application was allowed by this Hon’ble Tribunal vide its order dated 03.08.2021 giving directions to the ex-directors and other statutory authorities to abide by the provisions of Section 53 of the Code.

32.

The realization of all the assets of the Corporate Debtor, the liquidation account of the Corporate Debtor has been closed accordingly by the Answering Respondent and a closure letter for the said liquidation account was duly received by the Respondent from the bank.

35.

It is further submitted that the Appellants have no locus standi to challenge the order impugned herein as the Corporate Debtor herein of which the Appellants herein are the ex-promoters, as on date stands dissolved.

36.

It is also relevant to point out that the Appellants, who are challenging the order of dissolution and the subsequent orders did not even challenge the liquidation order passed by this Hon’ble Tribunal. Furthermore, the Dissolution order passed by the Adjudicating Authority is not going to affect adversely to its shareholders or creditors and nor it is contrary to the provisions of law.

38.

It is well settled law that a Court/Tribunal cannot compel a party to settle a matter and in the instant case when the OTS settlement had failed between the parties, the Appellants herein by way filing these frivolous Appeals are trying to compel the Hon’ble Tribunal which is not otherwise permitted in law.

40.

Interestingly, the Appellants have submitted that the order of dissolution was passed ex-parte against them however, it is relevant to note that the Appellants were not even a proper and necessary party to the I.A. 143 of 2021 filed by the Answering Respondent seeking dissolution of the Corporate Debtor.

41.

Even Section 54 of the Code is clear to that extent that a Liquidator can make an Application once the assets of the Corporate Debtor are completely liquidated, and the Appellant herein does not form a proper and a necessary party to the said application. It is further pertinent to mention herein that the proceedings under IBC are proceedings in rem and for the purpose of a Resolution. Furthermore, if no resolution is achieved, then the assets of the Company are sold and the creditors of the Corporate Debtor are sold and the amount realised is distributed amongst the Creditors in terms of Section 53 of the Code. Once the distribution is complete, the Company is legally dissolved. In view thereof, the Ex- directors/promoters i.e. the Appellants herein do not have any locus”.

“54.

Dissolution of corporate debtor – (1) where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor.

(2)

The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.

(3)

A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered”.