2022 (1) TMI 360 - Tri - Insolvency and Bankruptcy

Voluntary liquidation of Corporate Person through its liquidator(Insolvency Professional) - Section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT - In the present case, it may be seen from the records the main intention for the company to wind up its services is that company decided to close down its business operations in India and doesn t intend to carry on its business operations and pursue objects for which it was incorporated. Further, the applicant has informed the concerned authorities i.e. IBBI, RoC and Income Tax Department and has also made paper publication in Form-A in two newspapers. The Liquidator has completed the final distribution of assets and has also closed the bank account. The Liquidator has also prepared and submitted the final report to the IBBI and RoC. The Application is duly supported by the affidavit of the Liquidator. Income Tax Department has issued No Objection Certificate on 15.06.2020 and no litigation is pending against the corporate person as on signing of the final report. That, all the assets have been realized and liabilities have been paid off and remaining balance had been repatriated to the shareholders of the company and the bank balance is nil. Also the Board has stated that only requirement as per Section 59(4) is to notify the Board about the resolution passed by the company within seven days of such resolution. The Board has no other role in the liquidation proceedings before the Adjudicating Authority. The concerned RoC has also submitted in its report that as per data available and maintained, no inquiry/inspection/complaint/legal action has been proceeded/pending against the subject company. The applicant Company is hereby dissolved in terms of Section 59(8) of the Insolvency Bankruptcy Code, 2016 with effect from the date of the present order - Application allowed.

Issues Involved:
1. Voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.
2. Declaration of solvency by the Board of Directors.
3. Appointment of Liquidator and approval of voluntary liquidation.
4. Compliance with regulations for voluntary liquidation process.
5. Settlement of debts and distribution of assets to shareholders.
6. Dissolution of the company and communication of the order to statutory authorities.

Analysis:

Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016:
The Company Petition was filed for voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company decided to close down its business operations in India and pursue voluntary liquidation as per the provisions of the Code and the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.

Declaration of Solvency and Appointment of Liquidator:
The Board of Directors made a declaration of solvency and approved the voluntary liquidation process. A Liquidator was appointed, and a special resolution was passed in the Extra Ordinary General Meeting for the liquidation. The Liquidator was tasked with performing duties as required under Section 59(3)(c)(i) of the Code.

Compliance with Regulations for Voluntary Liquidation Process:
The company complied with various regulations for voluntary liquidation, including submitting audited financial statements, making public announcements for stakeholders to submit claims, and settling claims received from creditors during the liquidation period. The Liquidator also prepared and submitted the final report to the Registrar of Companies and the Insolvency and Bankruptcy Board of India.

Settlement of Debts and Distribution of Assets to Shareholders:
All ascertained debts were settled, arrangements for payment were made, and assets were realized to pay off liabilities. The Income Tax Department issued a No Objection Certificate, and no pending litigation was reported against the company. The remaining balance was repatriated to shareholders, and the bank balance was reduced to nil.

Dissolution of the Company and Communication of Order:
After thorough review and compliance verification, the company was dissolved in accordance with Section 59(8) of the Insolvency & Bankruptcy Code, 2016. The Liquidator was directed to communicate the order to the Registrar of Companies and other statutory authorities within the specified timeframe.

Conclusion:
The application for voluntary liquidation was allowed, and the company was dissolved. The Liquidator was instructed to communicate the order to relevant authorities promptly. The entire process was conducted in compliance with the legal requirements, ensuring the orderly dissolution of the company.

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