2021 (1) TMI 758 - Tri - Insolvency and Bankruptcy

Dissolution of the Corporate Debtor - section 54 of the IBC, 2016 and under Regulation 38(1) of IBBI (Liquidation Process) Regulations, 2016 - HELD THAT - The liquidator filed compliance affidavit confirming that after depositing the entire available amount in the liquidation account, the net balance of ₹ 35,987.67/- is left in the company's liquidation account towards remaining/provisional liquidation expenses of the liquidator till dissolution of the corporate debtor and after payment of the said amount, NIL balance will be available with the liquidator who undertakes to submit the details of all the expenses after dissolution to IBBI and to the Hon'ble Adjudicating Authority and close the account after depositing the balance, if any remaining with the liquidator in the liquidation bank account - Further in pursuance of Regulation 46 (5), the liquidator, has again submitted the details of undistributed amount along with the details of deposits made into the Corporate Liquidation Account in Form -I with IBBI, a copy of which is enclosed as Annexure V (Diary No. 982 dated 5-2-2020) and also as Annexure A-3 (Dy. No. 00659 dated 31-7-2020). Thus, it is established that due process of Liquidation, as per extant provisions, was followed by the Liquidator to liquidate the assets of Company and the realized amounts were also distributed to the respective claimants. Therefore, the liquidation process was deemed to have been completed under Chapter III of Part II of Code, and thus it would be just and appropriate for the Adjudicating Authority to dissolve the Company, by directing the Liquidator to close the Liquidation Account and other accounts of the Company, on receipt of this order. No party is going to be affected by dissolving the company. M/s. Tirupati Ceremics Limted, the Corporate Debtor, is hereby dissolved with immediate effect - application disposed off.

Summary

Issues Involved:
1. Application for dissolution under Section 54 of IBC, 2016.
2. Appointment and actions of the Liquidator.
3. Public announcement and claims by creditors.
4. Valuation and sale of assets.
5. Submission of reports and compliance with regulations.
6. Distribution of proceeds.
7. Final dissolution and closure of accounts.

Issue-wise Detailed Analysis:

1. Application for Dissolution under Section 54 of IBC, 2016:
The application (CA No. 584/2019) was filed by the Liquidator of M/s. Tirupati Ceramics Ltd. under Section 54 of the Insolvency and Bankruptcy Code (IBC), 2016, and Regulation 38(1) of the IBBI (Liquidation Process) Regulations, 2016, seeking the dissolution of the Corporate Debtor.

2. Appointment and Actions of the Liquidator:
The main company petition (CP (IB) No. 50/Chd/Hry/2017) was filed under Section 7 of the IBC, 2016, and admitted by the Adjudicating Authority on 29-9-2017, initiating the Corporate Insolvency Resolution Process (CIRP) and declaring a moratorium. Mr. Amit Sharma was appointed as Interim Resolution Professional (IRP) on 11-10-2017 and confirmed as Resolution Professional (RP) on 11-11-2017. Subsequently, he was appointed as the Liquidator on 22-3-2018.

3. Public Announcement and Claims by Creditors:
The Liquidator made a public announcement of liquidation on 26-3-2018 in two newspapers and invited claims from Financial/Operational Creditors and workers/employees. The order for liquidation was sent to the Registrar of Companies, Punjab, and other statutory authorities. The Liquidator collated and submitted a revised list of stakeholders based on the claims received by 29-5-2019.

4. Valuation and Sale of Assets:
The Liquidator appointed two registered valuers for the valuation of the Corporate Debtor’s assets. The fair value was determined to be ?6,33,76,975/-, and the liquidation value was ?5,46,41,229/-. The assets were sold through e-auctions, with land and building realizing ?18,76,00,000/- and scrap realizing ?17,65,000/-.

5. Submission of Reports and Compliance with Regulations:
The Liquidator submitted various reports, including the preliminary report, asset memorandum, and progress reports, detailing the progress, valuation, and sale of assets. The final report dated 25-7-2019 was submitted along with the application and compliance certificate in Form H.

6. Distribution of Proceeds:
The realized amount was distributed to the stakeholders as per Section 53 of the IBC, 2016. The details of the amount available for final distribution were provided, and the undistributed amount was deposited in the Company Liquidation Account in the Public Account of India.

7. Final Dissolution and Closure of Accounts:
The Liquidator confirmed that all assets were liquidated, and the realized amounts were distributed. The remaining amount was directed to be deposited in the Company Liquidation Account. The Liquidator was directed to close the pending Liquidation Bank Account and submit the details of all expenses after dissolution.

Judgment:
The Tribunal concluded that the due process of liquidation was followed, and the realized amounts were distributed to the respective claimants. The Corporate Debtor, M/s. Tirupati Ceramics Ltd., was dissolved with immediate effect. The Liquidator was permitted to close the pending Liquidation Bank Account within three weeks, and copies of the order were to be forwarded to the Registrar of Companies and other statutory authorities. The Liquidator was discharged, and CP (IB) No. 50/Chd/Hry/2017 was disposed of.