2019 (1) TMI 1777 - Tri - Insolvency and Bankruptcy

Voluntary liquidation - Section 59 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - A perusal of the material available on record, goes to show that the Board of Directors of the Company has taken a conscious decision to close down the company due to non-availability of business prospects and non-availability of long-term financial resources, thus, as per them, it would not be a wise decision to carry on the business activities of the company from the economic point of view. Therefore, Company's Board of Directors proposed to liquidate the company voluntarily by invoking the provisions of Section 59 of the IBC. Since there is no objection received from any angle opposing the voluntary liquidation of the company either from shareholders' side or from secured and unsecured creditors side or any adverse comments from public at large against such proposed liquidation, despite a public announcement was made by the liquidator in the website of the Insolvency and Bankruptcy Board of India (IBBI) - on perusal of the record of the present case, it is evident that the company is found not involved in any kind of business activities, wherein the public interest at large is involved or it is going to be affected adversely in case such dissolution of the company is ordered. Since nothing adverse is found from the material available on record in respect of opposing the proposed liquidation of the corporate person, the present application deserves to be allowed. This Adjudicating Authority in exercise of power conferred under Section 59 (8) of the Insolvency and Bankruptcy Code 2016, the Corporate Person (Applicant Company) M/s. Shree Autotech Forge Pvt. Ltd. is ordered to be dissolved with effect from 16.01.2019 - Petition allowed.

Issues Involved:
1. Voluntary liquidation of the company under Section 59 of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with procedural requirements for voluntary liquidation.
3. Appointment and actions of the liquidator.
4. Distribution of assets and settlement of liabilities.
5. Dissolution of the company.

Issue-wise Detailed Analysis:

1. Voluntary Liquidation of the Company:
The Applicant Company, "Shree Autotech Forge Private Limited," sought voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The Board of Directors decided to close the company due to non-availability of business prospects and long-term financial resources, making it financially non-viable to continue business activities. This decision was formalized in a Board Meeting on 4th May 2017 and confirmed through a Special Resolution in an Extraordinary General Meeting on 31st May 2017.

2. Compliance with Procedural Requirements:
The company complied with the statutory provisions of Section 59, including the necessary declarations from the majority of directors, audited financial statements, and records of business operations for the previous two years. These documents were filed with the Registrar of Companies, Gujarat, in form GNL-2. A public announcement of liquidation was made in newspapers and on the Insolvency and Bankruptcy Board of India (IBBI) website, inviting claims from stakeholders.

3. Appointment and Actions of the Liquidator:
Mr. Umesh Ved, a practicing Company Secretary and Insolvency Professional, was appointed as the liquidator. He performed his duties diligently, including opening a liquidation bank account, submitting a preliminary report, informing the Income Tax Department, and obtaining a "No Objection Certificate" from statutory authorities. The liquidator also filed necessary forms with the Registrar of Companies and communicated the liquidation process to relevant authorities.

4. Distribution of Assets and Settlement of Liabilities:
The company had no secured or unsecured creditors, and its net worth was distributed among shareholders. The liquidator ensured that all statutory dues were paid, and the company's assets were fully liquidated. The final report showing realization and payment to members was submitted to the Registrar of Companies and IBBI.

5. Dissolution of the Company:
The Tribunal found no objections from shareholders, creditors, or the public against the proposed liquidation. The company was not involved in any business activities affecting public interest. The Tribunal, exercising its power under Section 59(8) of the Insolvency and Bankruptcy Code, 2016, ordered the dissolution of "Shree Autotech Forge Private Limited" with effect from 16.01.2019. The liquidator was directed to communicate this order to the Registrar of Companies, IBBI, and other statutory authorities within fourteen days.

Conclusion:
The Tribunal concluded that the voluntary liquidation process was conducted in compliance with the relevant provisions of the Insolvency and Bankruptcy Code, 2016. The company was ordered to be dissolved, and the liquidator was instructed to inform the concerned authorities. The Company Petition was allowed and disposed of accordingly.

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