2019 (10) TMI 6 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of application - Liquidation/dissolution of the Corporate Debtor - Section 9 of the I B Code, 2016 - HELD THAT - There are no physical assets available for sale, this Authority in exercise of the powers conferred under Sub-section (2) of Section 54 of the I B Code, 2016, hereby order the dissolution of the Corporate Debtor, viz., M/s. Sattur Sri Ganga Chit Funds Private Limited from the date of this Order, and the Corporate Debtor stands dissolved. Consequently, the Resolution Professional stands relived. The Resolution Professional and the Registry are directed to send the copy of this order within 7 days from the date of pronouncement to the RoC with which the Corporate Debtor is registered. Application disposed off.

Summary

Issues involved:
1. Application under Section 54 of the Insolvency and Bankruptcy Code, 2016 for Liquidation of Corporate Debtor.
2. Approval of Resolution Professional's fees and expenses.
3. Replacement of Resolution Professional.
4. Dissolution of Corporate Debtor due to lack of assets.

Analysis:

1. The case involved an application filed by the Resolution Professional under Section 54 of the Insolvency and Bankruptcy Code, 2016, seeking permission to withdraw the application or order for liquidation of the Corporate Debtor, M/s. Sattur Sri Ganga Chit Funds Private Limited. The Resolution Professional highlighted issues such as non-admitted claims and lack of proper accounting records by the Corporate Debtor.

2. The Resolution Professional faced challenges regarding the approval of fees and expenses incurred during the Corporate Insolvency Resolution Process (CIRP). The Committee of Creditors (CoC) expressed unwillingness to pay the fees, leading to a dispute over the Resolution Professional's remuneration.

3. The CoC passed resolutions for the replacement of the Resolution Professional, approval for liquidation due to the absence of assets or business for a resolution plan, and fixing the Resolution Professional's fees. However, the Operational Creditor expressed difficulty in finding a replacement for the Resolution Professional, leading to discussions in subsequent CoC meetings.

4. After thorough examination of the Corporate Debtor's financial status, including debts, dues, and available assets, the Resolution Professional filed for dissolution of the Corporate Debtor due to the lack of physical assets for sale, unsupported liabilities, and improper maintenance of accounts post-April 2017. The Tribunal, exercising its powers under Section 54 of the I&B Code, 2016, ordered the dissolution of the Corporate Debtor, relieving the Resolution Professional from further responsibilities.

In conclusion, the judgment addressed various issues related to the insolvency proceedings, including the Resolution Professional's challenges, CoC decisions, and the ultimate dissolution of the Corporate Debtor due to financial insolvency and lack of assets.