2019 (2) TMI 1498 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - HELD THAT - Liquidator has complied with all the conditions and procedural requirements as specified under various provisions of Section 59 of the Insolvency and Bankruptcy Code, 2016 and also Regulation 3 of IBBI (Voluntary Liquidation Process) Regulations, 2017 before initiating Voluntary Liquidation Process of the Corporate Person. Shri Jayant Ranganath Deo, and two other Directors of Corporate Person by way of separated declarations even dated 22.07.2017 declared that they have made full enquiry into the affairs of the Company and have formed the opinion that the Company has no debt and that the Declaration of Solvency in the prescribed form is true and correct. All the issues relating to the affairs of the Company including shareholder s claim plus balance from liquidation proceeds stands resolved and nothing remains to be resolved in the Company. Thus we are of the considered opinion that the instant Petition/Application deserves to be allowed as prayed for.

Issues Involved:

1. Confirmation of the winding up of the Company and its dissolution.
2. Disposal of records, registers, and books of account.
3. Discharge of the Liquidator's powers and duties.
4. Compliance with procedural requirements under the Insolvency and Bankruptcy Code (IBC), 2016 and IBBI (Voluntary Liquidation Process) Regulations, 2017.

Issue-wise Detailed Analysis:

1. Confirmation of the Winding Up of the Company and its Dissolution:

The Company, incorporated on 23.04.1997, had suspended its manufacturing operations for a long time. The shareholders recommended winding up due to no foreseeable business prospects. The Board of Directors passed resolutions on 22.07.2017, noting the Declaration of Solvency, and recommended voluntary liquidation. The shareholders approved the dissolution and appointed Mr. Vishal Rai as the Liquidator on 31.07.2017. The Tribunal confirmed the winding up and dissolved the Company with immediate effect, as all conditions and procedural requirements under Section 59 of the IBC, 2016 and Regulation 3 of IBBI (Voluntary Liquidation Process) Regulations, 2017 were complied with.

2. Disposal of Records, Registers, and Books of Account:

The Liquidator undertook several actions post-liquidation commencement, including public announcements, notifying stakeholders, and engaging professionals for assistance. All claims were addressed, and statutory dues were confirmed to be settled. The Liquidator maintained proper records and ensured compliance with regulatory requirements. The Tribunal allowed the disposal of records, registers, and books of account, except those expressly required to be preserved under the regulations.

3. Discharge of the Liquidator's Powers and Duties:

The Liquidator, Mr. Vishal Rai, performed duties such as making public announcements, submitting preliminary and final reports, and managing the liquidation account. He ensured that no claims from stakeholders were pending and that all statutory dues were settled. The Liquidator also managed the distribution of liquidation proceeds and obtained necessary NOCs for remittance to foreign shareholders. The Tribunal discharged the Liquidator from his duties, recognizing his compliance with all procedural requirements.

4. Compliance with Procedural Requirements under IBC, 2016 and IBBI (Voluntary Liquidation Process) Regulations, 2017:

The Company followed all procedural requirements, including:
- Obtaining a declaration from the majority of directors verified by an affidavit.
- Submitting audited financial statements and a valuation report.
- Passing a special resolution for voluntary liquidation and appointing the Liquidator.
- Notifying the Registrar of Companies and the Board about the resolution.
- Publishing public announcements and submitting necessary reports to regulatory authorities.

The Tribunal noted that all procedural requirements were met, and the Liquidator complied with the conditions specified under Section 59 of the IBC, 2016.

Conclusion:

The Tribunal allowed the petition for voluntary liquidation and dissolution of the Company, directing the Registry to forward a copy of the order to the Registrar of Companies, Karnataka, Bangalore, and the Liquidator to notify all relevant authorities and publish a notification in local newspapers about the dissolution.

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