2021 (1) TMI 1148 - Tri - Insolvency and Bankruptcy

Seeking to realize the third party guarantee at the earliest - seeking to remit the CIRP Cost/ Liquidation Cost to the Liquidator - seeking to foreclose the Fixed Deposits as per the Liquidator s Letter and remit the proceeds of fixed deposits to Liquidation Bank Account and to pass suitable Orders for early dissolution of the Corporate Debtor - HELD THAT - The facts as mentioned justify dissolution of the Company rather than to continue Corporate Debtor under Liquidation process, under the extant provisions of Code and the Rules there under. Since nothing remains to be realised, the liquidation process under the provisions of Code is deemed to have been completed under Chapter Ill of Part Il of Code. Therefore, it would be just and proper for the Adjudicating Authority to dissolve the Company, as prayed for by the Liquidator. The Applicant without impleading necessary parties, cannot seek any directions against them and thus the Application is to be rejected on this ground alone. In addition to this, as rightly stated by Karnataka Bank Ltd., (Financial Creditor), the Applicant is not entitled for any additional fee as claimed. The Applicant got adequate fee in comparison to the work he has done. It is hereby dissolved the Corporate Debtor namely, M/s. Bunt Solar India Pvt. Ltd., with immediate effect - Application allowed.

Summary

Issues involved:
- Application seeking directions for realization of third party guarantee, remittance of CIRP/Liquidation Cost, and early dissolution of Corporate Debtor.

Analysis:
1. Background and Liquidation Process: The case involves the liquidation of a company where the Corporate Debtor was placed under liquidation due to insufficient assets for realization. The Liquidator made efforts to realize third party guarantees and fixed deposits to cover the liquidation costs.

2. Financial Creditor's Objections: The Financial Creditor, Karnataka Bank Ltd., objected to the application, arguing that the Liquidator's claims were misconceived. They contended that the Liquidator had not provided necessary documents for expenses verification and that the Liquidation expenses were not payable as they were enforcing security under SARFAESI Act.

3. Legal Provisions and Rules: The judgment referred to relevant sections of the Insolvency and Bankruptcy Code (IBC) and IBBI (Liquidation Process) Regulations, emphasizing the objective of resolving issues through a Resolution Plan or Corporate Debtor dissolution.

4. Decision and Directions: The Adjudicating Authority decided to dissolve the Corporate Debtor immediately as the liquidation process was deemed completed. The Authority rejected the application due to the Liquidator's failure to implead necessary parties and the adequacy of fees received by the Liquidator.

5. Final Directions: The judgment directed the dissolution of the Corporate Debtor, forwarding the order to relevant authorities, and clarified that the order did not absolve Directors/Promoters from personal liability. It allowed aggrieved parties to pursue legal action if necessary.

This detailed analysis of the judgment highlights the key issues, legal arguments, provisions, and the final decision regarding the liquidation process and dissolution of the Corporate Debtor.