2022 (3) TMI 818 - Tri - Insolvency and Bankruptcy

Dissolution of the Petitioner Company - Section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 and applicable rules of the National Company Law Tribunal Rules, 2016 - HELD THAT - In the present case, it can be seen that the Company is incorporated to carry on the business of manufacturing of watches and is a subsidiary company of M/s. HMT Ltd. The company had taken loan from Government of India towards meeting its working capital requirements and also for acquiring fixed assets. Since the losses were piling up and losses were much more than the paid up capital, the Government of India decided to close down the company. Accordingly the Government of India in Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industries issued an order No. 105011/6/2014-PE-X dated 13.01.2016. The liquidator has also prepared the list of stakeholders after due verification of claims The Liquidator has completed the final distribution of assets and has also closed the bank account. The voluntary liquidator has also prepared and submitted the final report to the IBBI on 13.08.2020 via e-mail and RoC on 19.08.2020. The Application is duly supported by the affidavit of the Voluntary Liquidator. 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.

Summary

Issues:
- Application for dissolution of a company under Section 59 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. The Company Petition was filed seeking dissolution under Section 59 of the Insolvency and Bankruptcy Code, 2016, along with relevant regulations and rules. The company in question, M/s. HMT Chinar Watches Limited, was incorporated to manufacture watches and faced financial difficulties leading to its closure by the Government of India. The decision to voluntarily liquidate the company was taken by the shareholders, and a liquidator was appointed through due process.

2. The Board of Directors passed a resolution for voluntary liquidation, and the Declaration of Solvency was filed as required by law. The company's financial statements were submitted, and stakeholders were invited to submit claims. Meetings were held with contributories, and reports were prepared and submitted as per regulations.

3. The liquidator undertook necessary steps, including public announcements, verification of claims, and settlement of outstanding liabilities. The final report detailing receipts and payments during the liquidation process was prepared and submitted to the relevant authorities.

4. The Income Tax Department and other statutory authorities were duly informed and no objections were raised to the voluntary liquidation. The bench reviewed the case and found all legal requirements and procedures were followed diligently. Consequently, the company was dissolved in accordance with Section 59(8) of the Insolvency & Bankruptcy Code, 2016.

5. The Liquidator was directed to communicate the dissolution order to the Registrar of Companies and other relevant authorities within the specified timeline. The petition for dissolution was allowed, and the matter was disposed of, concluding the legal proceedings related to the voluntary liquidation of the company.

This detailed analysis outlines the procedural steps followed, compliance with legal requirements, and the final decision to dissolve the company in a voluntary liquidation process as per the Insolvency and Bankruptcy Code, 2016.