2022 (8) TMI 615 - Tri - Insolvency and Bankruptcy

Dissolution of the corporate Applicant - Section 59 of the IBC, 2016 read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT - On examining the Application, documents annexed therewith and the submissions made by the Applicant/Liquidator, it emerges that affairs of the Company have been completely wound up and its assets have been completely liquidated and there is no litigation pending against the Company. It is further observed that ROC and Income Tax has filed its reports in response to the compliance affidavit dated 20.04.2022. On perusal of the affidavits, it is observed that the ROC and Income tax has no objection. That inspite of notice none appeared on behalf of the IBBI and accordingly no objection was raised. In view of the facts placed on record, averments and the submissions made by the Liquidator, the Company deserves to be dissolved. The Company is hereby dissolved with immediate effect - Application allowed.

Summary

Issues:
- Application for dissolution of a corporate entity under Section 59 of the IBC, 2016
- Compliance with voluntary liquidation regulations
- Approval and appointment of liquidator
- Declaration of solvency by directors
- Creditors' consent for voluntary liquidation
- Public announcement and regulatory filings
- Opening of a liquidation bank account
- Submission of preliminary and final reports by the liquidator
- Distribution of funds to creditors and shareholders
- Closure of liquidation account
- Reports by ROC and Income Tax Department
- Dissolution of the company

Analysis:

The judgment pertains to an application for the dissolution of a corporate entity, M/s. Spectrum Holidays Private Limited, under Section 59 of the Insolvency and Bankruptcy Code, 2016. The applicant, acting as the liquidator, filed the application for voluntary liquidation based on the unforeseen circumstances arising from the global impact of Covid-19 on the travel industry, resulting in the company's business decline. The board of directors approved voluntary liquidation due to the inability to sustain operations amidst stiff competition and shrinking margins in the industry.

The applicant complied with the necessary regulations, including obtaining a declaration of solvency from the majority of directors, submitting financial statements, and making public announcements regarding the commencement of liquidation. The creditors provided their consent for voluntary liquidation, eliminating the need for a creditors' meeting as per the IBC provisions. The liquidator also fulfilled regulatory requirements by opening a specific bank account for the liquidation process and submitting preliminary and final reports as mandated.

Furthermore, the distribution of funds to operational creditors was conducted in accordance with the regulations, and the liquidator closed the liquidation account after completing all necessary payments. Reports from the Registrar of Companies (ROC) and the Income Tax Department indicated no objections to the dissolution of the company, as there were no pending litigations or outstanding demands against the entity. The judgment, after examining all submissions and compliance documents, ordered the immediate dissolution of the company and directed the applicant to inform the ROC accordingly within a specified timeframe.