Uco Bank vs M/S. Bhuvee Stenovate Pvt. Ltd.

Per Shri Harish Chander Suri, Hon'ble Member (T):

In this Company Petition CP(IB) No. 515/KB/2018 under Section 7 of the Insolvency & Bankruptcy Code 2016, filed by UCO Bank, vide order of admission was passed on 12th March, 2019 and Mr. C.A. Kannan Tiruvengadam, an Interim Resolution Professional (IRP) was appointed as the IRP to initiate Corporate Insolvency Resolution Process against the Corporate Debtor M/s. Bhuvee Stenovate Private Limited.

The appointment of IRP was confirmed as Resolution Professional (RP) by the Committee of Creditors in its first meeting dated 10th April, 2019 by unanimous voting in favour of his appointment. The order of admission carried declaration of moratorium under Section 14. As per the orders, the IRP/RP published, public announcement in Form A, in two Newspapers viz., Economic Times (West Bengal & Odhisha Edition) and Anand Bazar Patrika (West Bengal Edition) on 14.03.2019 and also uploaded the same in the Website of IBBI and IIIPICAI (Insolvency Professional Agency).

The R.P. filed its Progress Reports from time to time. The first report was filed on 22nd April, 2019 wherein it was informed that claims under Regulation 7 from the Financial Creditor had been received to the tune of Rs.1,216.82 crore and under Regulation 8 from the Operational Creditor to the tune of Rs.1.41 crore. It was also informed that the RP had floated EOI to appoint two Valuers registered with the IBBI for conducting Valuation. It was further mentioned in the Ist Progress Report that the members of the COC had agreed to appoint M/s. PVRN & Co., Chartered Accountants, who have already completed the audit till 30th September, 2018, to complete forensic audit.

The R.P. filed its 2nd Progress Report on 17th June, 2019. Similarly, the 3rd Progress Report was filed on 10th July, 2019. The 4th Progress Report was filed on 7th August, 2019. 5th Progress Report was filed on 23.10.2019. It is submitted that the RP has been performing all his duties as per the provisions of the Code and the Rules applicable thereto.

It is submitted that as per Regulation 36A of CIRP Regulations 2016 which is regarding Invitation for Expression of Interest, the Resolution Professional had published brief particulars of the Invitation for EOI in Form G, on 29th May, 2019 in Ananda Bazaar Patrika (West Bengal Edition) and Business Standard (All India Edition). The date of submission of EOI was extended on June 26, 2019 and again on August 6, 2019 by way of publications in the Newspapers. It is submitted that electronic voting window was opened during July 15, 2019 to July 16, 2019 in respect of the 4th meeting of the COC held on July 10, 2019. 100% of the members of the COC decided in favour of seeking an extension of time period for completion of the CIRP of the Corporate Debtor by a further period of 90 days beyond 180 days. This Tribunal vide its order dated September 2, 2019 extended the time period for completion of the CIRP of the Corporate Debtor for a further period of 90 days.

It is further submitted in the Final Report that during the 6th COC meeting dated 4th September, 2019, the members of the COC deliberated upon the issue of relaxing eligibility criteria to invite more participants in the process. However, the COC decided not to amend the eligibility criteria on the above mentioned ground keeping in view the seriousness and the capability of the Potential Resolution Applicants. RP has further submitted that before the last date of submission of EOI, he had received 3 (three) EOIs from (1) M/s. Jindal Stainless Hisar Limited, (2) M/s. Sunflag Iron & Steel Co. Limited and (3) M/s. Prudent ARC Limited. The RP has further submitted that he made all the endeavor to continue the operations of the Corporate Debtor as a going concern for the purposes of maximization value of the Corporate Debtor but, till date no Resolution Plan has been received from any of the Resolution Applicants who had submitted the EOIs and as such at the meeting of the COC held on December 17, 2019 the COC deliberated that an attempt should be made to ensure revival of the Corporate Debtor under CIRP.

Pursuant to e-voting held between December 19, 2019 and December 21, 2019 in respect of the COC meeting held on December 17, 2019, 96.33% of the members of the COC decided in favour of seeking an exclusion of the time period of 60 days from 270th day of CIRP, which would expire on 6th December, 2019. A petition was thus filed by the RP for extension of CIRP to 330 days which was not granted by the Adjudicating Authority and an order was passed in this regard on 11th December, 2019 permitting the RP to file application for exclusion of such period before the expiry of 330 days from the date of commencement of CIRP in this case. The RP has further submitted that since there is no Resolution Plan and no litigation is stalling the resolution process, there would be no valid ground for filing an application for exclusion of time. Since none of the Prospective Resolution Applicants who had shown interest in other Group Companies, has submitted any Resolution Plan for this Corporate Debtor, the RP has thus prayed that an order might be passed under Section 33(1)(a) read with Section 33(1)(i) and/or 33(1)(ii) and/or 33(1)(iii) of the I&B Code, 2016 directing the Corporate Debtor to be liquidated.

We have gone through the Progress Reports submitted by the RP from time to time. Since none of the entities who had submitted their EOIs have finally shown any interest in submitting their Resolution Plan and since the period of 330 days has already expired on 4th February, 2020, the only option left with this Tribunal is to order Liquidation of the Corporate Debtor under Section 33(1)(a) of the I&B Code, 2016. The RP has consented to act as Liquidator in the present case and is directed to do so. As regards fee payable to the Liquidator, the COC has already taken its decision in its meeting held on 17th December, 2019 which shall be in accordance with the decision taken by the COC under Regulation 39B of the IBBI (Insolvency Resolution Process) Regulation, 2016.

In the aforesaid circumstances, we hereby pass the order of Liquidation of the Corporate Debtor as per the following orders:-