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Judgment
This is a Company Petition filed by the Liquidator in relation to voluntary liquidation of Salzer Magnet Wires Limited with CIN: U31300TZ2008PLC014746, under Section 59 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”), seeking dissolution of the Company.
It is stated that Salzer Magnet Wires Limited was incorporated on 08.09.2008 in Coimbatore with the object to manufacture, trade, purchase, sale, import and export with or without enamelled coated copper wires, Magnet Wire, Coil Wire, Inductor Wire, Transformer Wire, Motor Coil Wire, Insulated Wires, Winding Coils for Inductors, Transformers, Lighting, Ballasts, Relays and Timers, Motor applications, Auto Devices, electrical switchgear Industry and Electronics Industry, both for the domestic and industrial use, etc.,. The authorised, issued, subscribed and paid up share capital of the company was as under:
The list of shareholders of the company is annexed as Annexure - 3. The Board of Directors and Key Managerial persons of the company were as below:
It is stated that the Company had filed the latest Audited Financial Statements and Annual Returns with the Registrar of Companies, Coimbatore till the financial year ended before the commencement of liquidation i.e. 31.03.2019 and are annexed as Annexure - 4 & 5.
It is stated that the company had entered into a business transfer agreement on 08.03.2018 with Salzer Electronics Limited and transferred its business undertaking as a going concern to Salzer Electronics Limited for Rs.20,29,10,000/- and the Company was left with no business after the transfer. Hence, the Board of Directors decided to initiate the Voluntary Liquidation process.
It is stated that the Board of Directors in the meeting held on 13.11.2019 decided for initiating the Voluntary Liquidation process under the provisions of Section 59 of Insolvency and Bankruptcy Code. The Directors of the Company had given the Declaration on solvency of the company on 14.12.2019. Copy of the Declaration of Solvency along with Audited financial statements and record of business operations of the Company for the previous two years i.e., FY 2018-19 and FY 2017-18 are placed as Annexures -6 & 7.
It is stated that the members of the Company in their Extraordinary General Meeting held on 14.12.2019 passed a Special Resolution as required under Section 59 of the Code read with the IBBI (Voluntary Liquidation Process) Regulations, 2017 (hereinafter referred to as "Regulations") to liquidate the Company voluntarily and appointed Mr. Vasudevan Gopu to act as the Liquidator of the Company. Copy of the Special Resolution passed by the Members of the Company at the EGM held on 14.12.2019 is enclosed with this Petition as Annexure - 8. Copy of financial statements of the company as on date of commencement of voluntary liquidation i.e. 14.12.2019 is placed as Annexure – 11.
It is stated that the liquidator made a Public Announcement of commencement of liquidation in the newspapers - Financial Express (English) and Malai Murasu (Tamil) on 18.12.2019 and 17.12.2019 seeking submission of the claim by the stakeholders stating the last date for submission of claims as 13.01.2020. It is stated that consequent to the public announcement in newspapers and IBBI website, no claims were received. However, there were 109 equity shareholders as on the liquidation commencement date i.e. 14.12.2019 and is annexed as Annexure – 18.
It is stated that the special resolution was passed by the Members of the Company at the Extraordinary General Meeting approving the commencement of liquidation and appointment of liquidator and it was submitted to the Registrar of Companies in Form MGT-14 vide SRN R25423195 on 21.12.2019 as Annexure - 14.
It is stated that the Petitioner sent notice to Income Tax under Section 178 of the Income Tax Act, 1961 communicating the commencement of voluntary liquidation process of the company. It is stated that the Company had filed Income Tax return till the assessment year 2024-25. Copy of the notice sent to Income Tax Department and copy of the acknowledgement for Income Tax return filed for AY 2024-25 are placed as Annexure - 16.
It is stated that as required under Regulation 9 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, he prepared a preliminary report and submitted the same on 23.01.2020 as Annexure - 17.
It is stated that as on commencement of voluntary liquidation, the company had an outstanding debt of Rs.76,700/- payable to service provider "Swamy & Ravi, Chartered accountants" which was paid in full during the liquidation process.
It is stated that the liquidator opened a Bank account in the name 'Salzer Magnet Wires Limited in Voluntary Liquidation' with the Axis bank -Karamadai Branch, Coimbatore for the purpose of realization of the liquidation assets and payment of the liquidation proceeds to the entitled stakeholders.
It is stated that the majority portion of assets of the company being Investment shares were distributed among the shareholders without sale as per regulation 35(3) of the IBBI (Voluntary Liquidation Process) Regulations, 2017 and some portion of assets were distributed to stakeholders after realisation.
It is stated that the completion of liquidation process exceeded the prescribed timeline due to unforeseen challenges encountered in the distribution of the company's investment shares and also due to delay in getting Income Tax refunds. In compliance with Regulation 37 of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 as amended from time to time, the liquidator conducted the contributories meetings on 30.12.2020, 19.03.2022, 31.12.2022, 29.12.2023, 24.04.2024, 09.07.2024, 24.09.2024 and submitted the status reports. Copy of the Status Reports is enclosed as Annexure - 25.
The Petitioner has filed a memo vide Sr.No. 2469 dated 23.06.2025 explaining the reasons for the delay in submission of final report in the dissolution petition. The reasons are as follows:
As on the commencement of voluntary liquidation, this company Salzer Magnet Wires Limited had an Investment holding of 10,30,000 equity shares in Salzer Electronics Limited which was allotted to the company as consideration for transfer of its business to Salzer Electronics Limited and the above mentioned Investment holdings was under lock-in restriction in pursuance of Regulation 78(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulation 2009. As per regulation 35(3) of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 the liquidator may, with the approval of the corporate person, distribute amongst the stakeholders, an asset that cannot be readily or advantageously sold due to its peculiar nature or other special circumstances.
As the Investment holding of 10,30,000 equity shares in Salzer Electronics Limited being an asset that cannot be readily sold due to the lock-in restriction and as the Members of the Company at EGM held on 14.12.2019 passed necessary resolutions to wind up the entire affairs of the Company voluntarily and relatively consented to the distribution of the Company's Investment holdings hence the liquidator had decided to distribute the shares, among the stakeholders without sale.
The investment holding shares were under lock in restriction and there were difficulties in transfer of shares under a normal process and it required approval through corporate action. Liquidator also faced difficulties in collecting demat account details of shareholders for the purpose of this share distribution. Due to the above said reasons Liquidator had distributed the company's investment holdings of 10,30,000 equity shares in Salzer Electronics Limited ("SEL') among the shareholders of this company.
The company had some Income Tax refunds to be received for AY 2018-19 but due to some error in ITR filed the Income tax return was processed by the department with Income Tax demand of INR 2,43,400/- instead of Income Tax refund. Income tax demand arose instead of refund due to challan date error in the ITR filed by the company. Proper credit was not given to self-assessment of INR 3,00,000/- paid by the company. Hence, the company filed an application before the Income Tax department for rectification of Income tax return and processing of Income tax refund for AY 2018-
The income tax refund got credited to the liquidation account only on November 2024.
It is stated that the affairs of the Company have been completely wound up and assets of the Company have been completely distributed to the concerned stakeholders as per the distribution mechanism prescribed under Section 53 of IBC, 2016. The liquidation bank account was closed on 31.01.2025. Copy of closure confirmation received from bank is placed as Annexure - 26.
It is stated that the Petitioner has submitted the audited accounts of the liquidation, showing receipts and payments along with the Liquidator's final Statement of Accounts as per Regulation 10 of the IBBI (Voluntary Liquidation Process) Regulations, 2017 and the same are enclosed with this Petition as Annexure - 21. It is stated that the Petitioner has prepared the Final Report and Form - H in accordance with Regulation 38(3) of the IBBI (Voluntary Liquidation Process) Regulations, 2017. The final report was submitted with Registrar of Companies and the Insolvency and Bankruptcy Board of India on 31.03.2025 and a copy of the report and Form- H are placed as "Annexure-22 & 23".
It is stated that there are no pending litigations or any PUFE Transactions as stipulated under Sections 43, 45 , 50, and 66 of IBC.
It is stated that the audited financial statements for the year ended 31.03.2018 and 31.03.2019 are placed at Pg. No. 114 – 167. Upon completion of the liquidation process, the Final report in accordance with Regulation 38 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 prepared on 31.03.2025 is placed at Pg. No.336 – 349 and Form-H is placed at Pg. No.350 – 358.
It is stated that the Petitioner has conducted the Voluntary Liquidation process in accordance with the IBBI (Voluntary Liquidation Process) Regulations, 2017. The details of the compliances as mandated under Section 59 of the IBC, 2016 read with the IBBI (Voluntary Liquidation Process) Regulations, 2017 are listed hereunder:
| S.N | COMPLIANCE | AVERMENTS | PAGE NO. IN THE PETITION |
|---|---|---|---|
| 1. | Section 59(3)(a) r/w Reg 3(4) | Declaration by way of an Affidavit from majority of the Directors dated 14.12.2019. | PAGE NO. 94 – 113 |
| 2. | Section 59(3)(b)(i) | Audited Financial Statements for the years ended 31.03.2018 and 31.03.2019. | PAGE NO. 114 – 167 |
| 3. | Section 59(3)(b)(ii) | No assets except bank balance. Hence, there is no requirement to file valuation report. | PAGE NO. 172 – 182 |
| 4. | Section 59(3)(c)(i) | Special Resolution requiring the Company to be liquidated voluntarily and appointing an insolvency professional within 4 weeks from the Declaration made under Section 59(3)(a) dated 29.01.2025. | PAGE NO. 168 – 169 |
| 5. | Proviso to Section 59(3)(c) | Approval of Resolution passed under Section 59(3)(c) by creditors (2/3rd in value) if any, within 7 days of the date of Resolution. | PAGE NO. 171 |
| 6. | Section 59 (4) | Intimation to RoC & IBBI within 7 days from the date of the Resolution dated 17.12.2019 & 21.12.2019. | PAGE NO. 187 – 193 |
| 7. | Regulation 14 | Form A Public Announcement in Financial Express (English) and Makkal Kural (Tamil) dated 17.12.2019. | PAGE NO. 183 – 186 |
| 8. | Regulation 30 | Claim filed by Stakeholders under Chapter V of the Regulations | PAGE NO. 206 – 213 |
| 9. | Regulation 9 | Filing of preliminary report dated 23.01.2020. | PAGE NO. 201 – 205 |
| 10. | Regulation 34 | Opening and closing of bank account details is stated that the bank account was opened in name of ‘'Salzer Magnet Wires Limited in Voluntary Liquidation” and was closed on 30.01.2025. | PAGE NO. 412 – 420 |
| 11. | Regulation 37 | The date of completion of the Liquidation process is 31.03.2025. | PAGE NO. 320 – 358 |
| 12. | Regulation 38 | Final report in GNL-2 filed with the ROC, IBBI | PAGE NO. 336 – 349 |
| 13. | Regulation 38 | Form-H – Compliance Certificate | PAGE NO. 23 – 27 |
The realization from the voluntary liquidation process as stated in the Petition is as follows:
It is stated that, after making various payments including liquidation costs paid in full and as per the provisions of Section 53(1) of IBC, 2016, the Liquidator distributed the funds among the shareholders as detailed below:
On considering the submissions made by the Petitioner and after perusing the documents annexed to the Petition, we find that the affairs of the Company have been completely wound up and the assets of the Petitioner Company have been completely liquidated. As such the Petitioner Company deserves to be dissolved. Accordingly, in exercise of the powers conferred under Section 59(8) of IBC, 2016, we order for the dissolution of Salzer Magnet Wires Limited. The Petitioner Company is dissolved from the date of this order.
Regulation 41 of the IBBI Regulation prescribes that the liquidator shall preserve a physical or an electronic copy of the reports, registers and books of account referred to in Regulations 9 and 10 for at least eight years after the dissolution of the corporate person, either with himself or with an information utility. However, no specific procedure has been laid down with respect to the preservation of the records of the company maintained prior to liquidation.
However, the provisions of section 347 of the Companies Act, 2013 provides that:
“(1)When the affairs of a company have been completely wound up and it is about to be dissolved, the books and papers of such company and those of the Company Liquidator may be disposed of in such manner as the Tribunal directs.
(2)After the expiry of five years from the dissolution of the company, no responsibility shall devolve on the company, the Company Liquidator, or any person to whom the custody of the books and papers has been entrusted, by reason of any book or paper not being forthcoming to any person claiming to be interested therein.”
The Liquidator, Mr. Vasudevan Gopu, is discharged as the Liquidator of the Corporate Debtor. The RoC is directed to change the status of the Corporate Debtor as “Dissolved”.
Thus taking into consideration of the above said provision of the Act this Tribunal directs the liquidator and company officials to preserve the books and records and other papers of the company for eight years from the date of dissolution of the company.
The Registry and the Liquidator are directed to serve copy of this order to the Registrar of Companies, and also to IBBI, within 14 days from the date of this Order.
In terms of the above, this CP(IB)/133(CHE)/2025 is allowed.
File be consigned to records.