T. R. Steel Pvt Ltd vs VB Power Pvt Ltd

It is an application filed by the Liquidator seeking an Order under Section 54 of the Insolvency and Bankruptcy Code, 2016 for granting “Dissolution” of Corporate Debtor.

The Adjudicating Authority vide its order dated 05.02.2019 on a Petition filed by the Petitioner under Section 9 of the Code directed initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor namely M/s. V. B. Power Pvt. Ltd., wherein Mr. Fanendra H. Munot, was appointed as Interim Resolution Professional (IRP). Thereafter, in the 1^st Committee of Creditors (CoC) meeting held on 15.03.2019, Mr. Fanendra H. Munot, was resolved to be appointed as Resolution Professional (RP).

The Applicant had taken necessary steps as prescribed under the Code and constituted ‘Committee of Creditors’. The Applicant in compliance of law on 15.02.2019 made publication in “Financial Express” in English and “Maharashtra Times” in Marathi inviting claims from the creditors of the Company.

The Applicant/ Liquidator states that an Order under Section 33(2) was passed on 04.12.2019 and the Debtor Company was allowed to be ‘Liquidated’ under the provisions of The Insolvency and Bankruptcy Code, 2016.

The Resolution Professional after receiving the claim from the creditors had made the assessment and on 17.02.2020 submitted Preliminary Report and Asset Memorandum on 31.03.2021 to the Adjudicating Authority.

The Applicant submits that there are no assets in the Corporate Debtor and no recovery proceeding pending. It is further submitted that as per balance sheet there were some trade receivable of Rs. 49,90,000/-pending. An application bearing No. 2654 of 2019 was filed for recovering the amounts from Mr. Patil as his name was reflecting in the balance sheet. However, after receiving the reply on behalf of Mr. Patil and verifying contents of his reply it was observed that the entry was wrongfully pending.

The Applicant realized the amount and distributed the same accordingly. The applicant state that the upon distribution the Debtor Company has no Asset left which can be liquidated as is also evident from the Report of the Liquidator.

On 04.01.2021, the Learned Liquidator filed final Progress Report of the Corporate Debtor under Regulation 15 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. On careful perusal of the Application and the Progress Report on record it is noticed that neither there are Assets left with the Corporate Debtor nor any trade receivables are available. According, to Learned Liquidator the Debtor Company has no Asset which can be liquidated as is also evident from the Report of the Liquidator.

As per the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations 2016, vide Regulation No.14, it is prescribed as under:-

In the light of the above it is noticed that the Corporate Debtor does not have assets to be liquidated hence an Application is moved for the “Dissolution of the Corporate Debtor”. This Section is to be read along with Regulation 14 of IBBI (Liquidation Process) Regulations 2016 which says that any time after the preparation of a Preliminary Report if it appears to the Liquidator that the realizable properties of the Corporate Debtor are insufficient to cover the cost of Liquidation process, and the affairs of the Debtor do not require further investigation may apply to NCLT for early dissolution of the Corporate Debtor.

The Applicant/ Liquidator submits that the as per Regulation 13 of IBBI (Liquidation Process) Regulations, 2016 Preliminary report was filed on 17.02.2020 and the final report dated 04.01.2021 was filed.

That the liquidator while preparing the Final progress report came to the conclusion that there being no assets realizable or saleable, it will only increase the cost of liquidation and therefore, it can opt for “Dissolution”.

For the purpose of pronouncement of Dissolution of a Corporate Debtor Section 54 of The Insolvency and Bankruptcy Code, 2016 reads as under :-

In this connection it is also worthwhile to refer Section 59, Sub-Section 7 of IBC. Although this Section is in respect of Voluntary Liquidation of a Corporate Person, however, according to which where the affairs of the Corporate Person have been completely wound up, and its assets completely liquidated, the Liquidator shall make an Application to Adjudicating Authority for the Dissolution of such Corporate person. This Sub-Section is simply referred for the reason that in all such situation an Application is to be moved for seeking an Order of “Dissolution of a Corporate Person”.

As a consequence, through this Order it is hereby declared that not only it is just and equitable but because of the fact that no asset is available for the purpose of ‘Liquidation’ as reported by Learned Liquidator, this is a fit case of a Corporate Debtor to be dissolved as prescribed under Section 54 of The Insolvency and Bankruptcy Code, 2016. Ordered accordingly, stood ‘Dissolved’ from the date of this Order.

Since the Debtor Company stood Dissolved vide this order and no proceedings are now pending, therefore the Registry is directed that the case file be consigned to records.

Copy of this Order shall be forwarded within 7 (seven) days to the concerned authorities and the Registrar of Companies having jurisdiction, for further necessary action as prescribed under Law.

IA No. 903 of 2021 is hereby allowed and disposed of accordingly.