2022 (8) TMI 995 - Tri - Insolvency and Bankruptcy

Dissolution of Corporate Debtor - Section 54(1) of Insolvency and Bankruptcy Code, 2016 read with Rule 11 of National Company Law Tribunal Rules, 2016 and Regulations 45(3)(b) of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT - It is noticed that since there is no possibility to continue the liquidation process of the corporate debtor in the absence of any assets/documents/records and personnel of the corporate debtor, it is just and equitable to allow the prayer of the Applicant. Furthermore, there are no pending litigations against the Corporate Debtor. Consequently, it is not only just and equitable, but also necessary as no sale proceeds are available to satisfy the creditor's dues(s). The present case falls within the parameters of Regulation 14 of Liquidation Regulation and is a fit case for Order of dissolution--the Corporate Debtor M/s. Digicontrol Northern Pvt. Ltd. stands 'Dissolved' from the date of this Order. Since the Company stands Dissolved vide this Order and no proceedings are pending, the Registry is directed that the case file be consigned to records - application allowed.

Summary

Issues:
- Application for early dissolution of the Corporate Debtor under Section 54(1) of the Insolvency and Bankruptcy Code, 2016.
- Compliance with Liquidation Regulations for early dissolution.
- Sufficiency of assets to cover liquidation costs and creditor dues.
- Jurisdiction and law of limitation.
- Final order for dissolution and closure of the Bank Account.

Analysis:
1. The Interim Application was filed seeking directions for the early dissolution of the Corporate Debtor under Section 54(1) of the Insolvency and Bankruptcy Code, 2016, read with relevant rules and regulations. The Liquidator submitted reports detailing the liquidation process, including the sale of assets and recovery of costs.

2. The Application was based on the Liquidator's assessment that the realizable properties of the Corporate Debtor were insufficient to cover the liquidation costs, and no further investigation into the affairs of the Corporate Debtor was required. The Liquidator followed Regulation 14 of the Liquidation Regulations for early dissolution.

3. The Final Report indicated that all costs related to the liquidation process were covered through the sale proceeds of the assets, but there were no funds left to pay off the debts of the Corporate Debtor's creditors. The liquidation process was completed within the stipulated timeframe.

4. The Adjudicating Authority confirmed jurisdiction over the matter and noted that no pending litigations existed against the Corporate Debtor. The Liquidator's application for dissolution was deemed just and equitable under the circumstances.

5. Considering the absence of assets, documents, records, and personnel of the Corporate Debtor, the Adjudicating Authority found it appropriate to grant the prayer for early dissolution. The Order for dissolution was issued, and the Corporate Debtor was officially dissolved from the date of the Order.

6. As the Company was dissolved, the Registry was directed to archive the case file, and the Liquidator was instructed to complete the closure of the Bank Account used for liquidation purposes. The Liquidator was further required to file the necessary documents with the Registry for record-keeping.

7. Copies of the Order were to be forwarded to relevant authorities and the Registrar of Companies for further action as per legal requirements within a specified timeframe. The judgment concluded the process of early dissolution of the Corporate Debtor, ensuring compliance with applicable laws and regulations.