2019 (6) TMI 369 - Tri - Insolvency and Bankruptcy

Dissolution of the Company under Liquidation - HELD THAT - The Liquidator in its Final Report dated 28.02.2019 has reiterated that as there was no records, documents, books of account available and the Directors/Promoters of Corporate Debtor were not traceable, the procedure provided under law for the CIR Process/Liquidation could not be effectively followed up. The report provides that an agricultural land admeasuring 5.26 acres situated at Pudhukottai belonging to the Personal Guarantor viz., R. Valli, one of the Directors and Promoters of the Corporate Debtor was mortgaged to State Bank of India (SBI), and the SBI being the mortgagee, shall hold the aforesaid land in furtherance to the order dated 20.01.2017 passed by the Debt Recovery Tribunal, Chennai, and in this regard, the SBI had submitted an Affidavit along with the claim stating that the aforesaid land belongs to the Promoter and mortgaged exclusively in favour of State Bank of India and the said asset does not fall under Liquidation Estate in terms of Section 36 of IBC, 2016 - The Report further provides that the Liquidator could not appoint any Valuers in the absence of Financial Records and/or any discoverable assets, as prescribed under the Insolvency and Bankruptcy Code, 2016. The Report also provides that there are no legal proceedings instituted, concluded or pending for and against the Company during the Liquidation proceedings. This Authority in exercise of the powers conferred under Sub-section (2) of Section 54 of the I B Code, 2016, hereby orders the dissolution of the Corporate Debtor viz . , M/s. Tech Megacorp International Private Limited from the date of this Order and the Corporate Debtor stands dissolved. Consequently, the Liquidator stands relieved - The Liquidator and the Registry are directed to send the copy of this order within 7 days from the date of pronouncement to the RoC with which the Corporate Debtor is registered. Application disposed off.

Summary

Issues:
Liquidation process under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The Liquidator filed an application under Section 54 of the Insolvency and Bankruptcy Code, 2016, seeking various orders related to the liquidation process.
2. The Corporate Insolvency Resolution Process (CIRP) was initiated earlier, with the Liquidator appointed during the process.
3. Claims were received from stakeholders, with the Committee of Creditors constituted, mainly comprising the State Bank of India as the sole Financial Creditor.
4. Due to the unavailability of records and cessation of business operations, no Resolution Plan materialized, leading to the liquidation order.
5. The Liquidator prepared reports, maintained claim registers, and incurred costs for which directions were sought for payment by stakeholders.
6. The Final Report highlighted the challenges faced due to the lack of records and traceability of Directors/Promoters.
7. Details about a mortgaged agricultural land belonging to a Personal Guarantor were provided, along with legal proceedings against the Corporate Debtor.
8. The Tribunal, exercising powers under the Insolvency and Bankruptcy Code, 2016, ordered the dissolution of the Corporate Debtor and relieved the Liquidator.
9. Directions were given for sending the order copy to the Registrar of Companies and for the payment of liquidation costs to the Liquidator by the Secured Creditor.
10. The Liquidator was held entitled to liquidation costs, and the application was disposed of accordingly.