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2021 (6) TMI 532 - Tri - Insolvency and BankruptcyDissolution of Corporate Debtor - Corporate Person have been completely wound up - assets completely liquidated - Section 54 of IBC - HELD THAT - The Corporate Debtor does not have assets to be liquidated hence an Application is moved for the Dissolution of the Corporate Debtor . This Section is to be read along with Regulation 14 of IBBI (Liquidation Process) Regulations 2016 which says that any time after the preparation of a Preliminary Report if it appears to the Liquidator that the realizable properties of the Corporate Debtor are insufficient to cover the cost of Liquidation process, and the affairs of the Debtor do not require further investigation may apply to NCLT for early dissolution of the Corporate Debtor - That the liquidator while preparing the Final progress report came to the conclusion that there being no assets realizable or saleable, it will only increase the cost of liquidation, can opt for Dissolution . Although this Section is in respect of Voluntary Liquidation of a Corporate Person, however, according to which where the affairs of the Corporate Person have been completely wound up, and its assets completely liquidated, the Liquidator shall make an Application to Adjudicating Authority for the Dissolution of such Corporate person - this is a fit case of a Corporate Debtor to be dissolved as prescribed under Section 54 of The Insolvency and Bankruptcy Code, 2016. Application allowed.
Issues:
1. Application for Dissolution of Corporate Debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016. Analysis: The judgment pertains to an application filed by the Liquidator seeking an Order for the "Dissolution" of the Corporate Debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was initiated earlier, and subsequent developments led to the decision for "Liquidation" as the Corporate Debtor had no fixed assets, no employees, and was incurring regular losses. The Committee of Creditors approved the "Liquidation," and an Order was passed under Section 33(2) for the same. The Liquidator took necessary steps for the liquidation process, including public announcements inviting claims from creditors and transferring securities to a new account. The Liquidator received claims from various stakeholders, conducted fund distributions from the liquidation bank account, and entered into an agreement for the storage of records and documents of the Corporate Debtor. The final Progress Report indicated that the Corporate Debtor had no assets left for liquidation, leading to the decision for "Dissolution." The Liquidator filed the Asset Memorandum, confirming the assets of the Corporate Debtor, and detailed the fund distribution process. The Liquidator also obtained a No Objection Certificate (NOC) from the Income Tax department. The Liquidator applied for the "Dissolution" of the Corporate Debtor as per Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016, considering the insufficient realizable properties and the conclusion that further investigation was unnecessary. The judgment referred to relevant sections of the Insolvency and Bankruptcy Code, 2016, outlining the process for the dissolution of a Corporate Debtor. The Adjudicating Authority ordered the dissolution of the Corporate Debtor, considering the absence of assets for liquidation and the completion of all necessary proceedings. The case file was directed to be consigned to records, and the order was to be forwarded to the concerned authorities and the Registrar of Companies for further action. In conclusion, the application for the dissolution of the Corporate Debtor was allowed, and the case was closed as the Corporate Debtor was declared dissolved from the date of the order, with all necessary actions and formalities to be completed as per the law.
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