2022 (5) TMI 806 - Tri - Insolvency and Bankruptcy

Dissolution of Corporate Debtor - Section 59 of Insolvency and Bankruptcy Code, 2016 (IBC, 2016) read with Regulation 38 of Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT - It is noted that the Board of Directors of the Corporate Person has taken a conscious decision for closing down the Corporate Person because the shareholders of the Corporate Person do not want to continue with the business as they do not see any business opportunity in upcoming years. Hence, the Board of Directors vide its Extra Ordinary General Meeting dated 15.12.2020 passed a Special Resolution to voluntarily liquidate the Company and to appoint Mr. Bhupendra Singh Narayan Singh Rajput as liquidator. It also appears that the liquidator, after his appointment, has duly performed his duties and completed the necessary formalities to complete the liquidation process of the Corporate Person -Applicant. It also appears that the realized amount has been duly distributed between the shareholders as per their claims. Since there are no Creditors in the Corporate Person, no claims is received. It also appears that no objection is received from any person opposing the proposed voluntary liquidation either from the side of the shareholders or from creditors nor any adverse comment is received from the public at large against such liquidation - After distributing the proceeds of the Corporate Person, the liquidator files its final report wherein it is clearly stated that nothing remains to be realized in the Corporate Person. This Adjudicating Authority in exercise of power conferred to it under Section 59(8) of the IBC, 2016 orders that the Corporate Person (Applicant Company) M/s. Sohangiri Metals and Alloys Private Limited shall stand dissolved from the date of this order - Application allowed.

Summary

Issues:
1. Petition for dissolution under Section 59 of IBC, 2016 and Regulation 38 of Liquidation Regulations, 2017.

Analysis:
The judgment pertains to a petition filed by the Liquidator seeking an order for the dissolution of a Corporate Person under the provisions of the Insolvency and Bankruptcy Code, 2016, and the Liquidation Regulations, 2017. The Corporate Person, a metals and alloys company, decided to wind up its operations voluntarily due to the lack of business opportunities in the foreseeable future. The Board of Directors, after conducting a thorough inquiry, declared that the company had no debts and was not being liquidated to defraud any party. The necessary procedures under the IBC, 2016, were diligently followed, including the submission of declarations, holding an Extra Ordinary General Meeting, and making public announcements for stakeholders to submit claims.

The Liquidator prepared and submitted reports as required by the regulations, disclosing the financial status of the Corporate Person, which showed minimal assets and only two shareholders as creditors. The distribution of proceeds was completed as per the claims of the shareholders, and no objections were raised against the voluntary liquidation process. The Liquidator fulfilled all obligations, including closing the bank account after payment to stakeholders and submitting the final report stating that no assets required realization. The Tribunal noted that the liquidation process was conducted transparently, with no pending investigations against the company, and no objections received from any concerned parties.

Based on the facts and circumstances presented, the Tribunal found that the application for dissolution of the Corporate Person was justified. Consequently, the Tribunal ordered the dissolution of the Corporate Person, directing the Liquidator to inform the Registrar of Companies and other relevant authorities about the decision within a specified timeframe. The application was allowed, and the matter was disposed of in accordance with Section 59(8) of the IBC, 2016.

This detailed analysis of the judgment highlights the procedural compliance, financial status, stakeholder involvement, and the Tribunal's decision regarding the voluntary dissolution of the Corporate Person.