2022 (8) TMI 1108 - Tri - Insolvency and Bankruptcy

Dissolution of the company - Voluntary Liquidation of Corporate persons - Section 59 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - A bare perusal of the material available on record shows that the Board of Directors of the Company has taken a conscious decision for closing down the company, because the company has not commenced any business since incorporation. Thus, the Board of Directors of the company have unanimously proposed to liquidate the company by invoking the provisions of voluntary liquidation under Section 59 of the Code. From the perusal of the record of the case, it is seen that the Liquidator, after his appointment has duly performed his duties and completed necessary formalities to complete the liquidation process of the applicant company, which has been averred in the present petition and, thus, the liquidator has prayed for an order from this Tribunal to dissolve the applicant company - Apart, as per record of the present case, it is seen that the company is not found involved in such kind of business activities, which are detrimental to the interest of public at large. Further, it is not the case that the proposed liquidation may affect adversely to its shareholders/members or is contrary to the provisions of law. Liquidation/Dissolution of the Corporate Person is ordered - petition allowed.

Issues Involved:
1. Compliance with Section 59 of the Insolvency and Bankruptcy Code, 2016.
2. Declaration of Solvency and absence of debts.
3. Appointment and actions of the Liquidator.
4. Public announcement and stakeholder claims.
5. Communication with regulatory authorities.
6. No Objection Certificate from the Income Tax Department.
7. Filing of financial statements and compliance with the Companies Act, 2013.
8. Finalization of liquidation process and dissolution of the company.

Issue-wise Detailed Analysis:

1. Compliance with Section 59 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed under Section 59 of the Insolvency and Bankruptcy Code, 2016, seeking the dissolution of the applicant company, M/s Huawei Telecom Services (India) Pvt. Ltd. The Tribunal reviewed the statutory provisions of Section 59, which allows for voluntary liquidation of a corporate person that has not committed any default.

2. Declaration of Solvency and Absence of Debts:
The applicant company complied with Section 59(3)(a) by filing a declaration signed by the Board of Directors, stating that a full inquiry into the affairs of the company had been conducted and that the company had no debts. The directors also submitted a Declaration of Solvency via affidavits, asserting that the liquidation was not intended to defraud any person.

3. Appointment and Actions of the Liquidator:
An Extra Ordinary General Meeting (EOGM) was convened on 01.05.2019, where a special resolution was passed to voluntarily liquidate the company and appoint Mr. Yash Jeet Basrar as the Liquidator. The Liquidator published a public announcement and invited claims from stakeholders, but no claims were received. The Liquidator opened a bank account for the liquidation process, distributed the proceeds to stakeholders, and closed the account after making necessary payments.

4. Public Announcement and Stakeholder Claims:
The Liquidator published announcements in "Financial Express" and "Jansatta" newspapers and uploaded the announcement on the IBBI website. Despite the public announcement, no claims were received from creditors or stakeholders.

5. Communication with Regulatory Authorities:
The company notified the Registrar of Companies (RoC) and the Insolvency and Bankruptcy Board of India (IBBI) about the voluntary liquidation and the appointment of the Liquidator. The RoC confirmed that no inquiry or legal action was pending against the company, although the company had initially failed to file its financial statements for the fiscal year 2018-19. This was later rectified by filing E-form GNL-2.

6. No Objection Certificate from the Income Tax Department:
The Liquidator obtained a No Objection Certificate from the Income Tax Department, confirming that there were no pending tax liabilities against the company.

7. Filing of Financial Statements and Compliance with the Companies Act, 2013:
The RoC noted that the company had violated provisions of Section 137(1) and 92(4) of the Companies Act, 2013, by not filing its financial statements and annual returns for the fiscal year 2018-19. However, this was later rectified by filing the necessary documents.

8. Finalization of Liquidation Process and Dissolution of the Company:
The Liquidator submitted a preliminary report and a final report to the RoC and the IBBI. The Tribunal found that the Liquidator had complied with all statutory provisions and completed the liquidation process. Consequently, the Tribunal ordered the dissolution of the applicant company with effect from 22.08.2022.

Conclusion:
The Tribunal, after careful consideration of the petition and compliance with statutory provisions, ordered the dissolution of M/s Huawei Telecom Services (India) Pvt. Ltd. The Liquidator was directed to communicate the order to the RoC and the IBBI within 14 days. The company petition was allowed and disposed of.

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