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2022 (4) TMI 1165 - Tri - Insolvency and BankruptcyDissolution of the corporate debtor - Section 54(1) of the Insolvency and Bankruptcy Code, 2016, read with Regulation 45(3) of insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT - It is noticed 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, he may apply to NCLT for early dissolution of the Corporate Debtor. Further it is noted that Stakeholders committee could not be constituted. Therefore, it is just and equitable that the corporate debtor be dissolved from the date of this order. Accordingly, the corporate debtor stands 'Dissolved' from the date of this Order. Directions to be issued to IBBI for payment of fees has been sought, as there is no specific provision under law to issue such directions to IBBI. Hence, the said prayer stands declined - application moved by liquidator for dissolution of the Corporate Debtor stands admitted.
Issues:
Application for early dissolution of the corporate debtor under Section 54(1) of the Insolvency and Bankruptcy Code, 2016. Analysis: 1. The application was filed by the liquidator of the Corporate Debtor for early dissolution under Section 54(1) of the Insolvency and Bankruptcy Code, 2016, and Regulation 45(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. 2. The case originated from an application under section 9 of the IBC, 2016, filed by an operational creditor against the Corporate Debtor, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP). Subsequently, a liquidator was appointed for the Corporate Debtor after the initiation of the liquidation process. 3. Following the initiation of the liquidation process, the liquidator made public announcements to call for stakeholder claims, verified the received claims, and submitted necessary reports and memorandums as per the regulations. 4. Due to insufficient funds and zero realizable value of assets, the liquidator failed to appoint a registered valuer for asset valuation within the required timeline after the initiation of liquidation. 5. The proposed timeline for liquidation completion was one year from the liquidation commencement date; however, certain pending matters delayed the process beyond the proposed timeline. 6. With no assets except a minimal amount in a bank account, the liquidator filed an application for the dissolution of the Corporate Debtor, supported by the final report and compliance certificate served to relevant authorities. 7. The Adjudicating Authority considered the application for dissolution in light of Section 54 of the Code and Regulation 14 of the Liquidation Process Regulations, noting the insufficiency of realizable properties to cover liquidation costs and the absence of a stakeholders committee, leading to the decision to dissolve the Corporate Debtor. 8. The bench declined a specific prayer clause seeking directions for payment of fees to IBBI, as there was no legal provision for such directions, and admitted the liquidator's application for dissolution of the Corporate Debtor.
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