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2021 (12) TMI 1152 - Tri - Insolvency and BankruptcyDissolution of the corporate debtor - Section 54 of the Insolvency and Bankruptcy Code, 2016, read with Regulation 14 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 absence of any assets/documents/records and personnel of the corporate debtor. The present case fits in the provisions of Sec. 54 of IBC read with Rule 14 of Liquidation Regulations and it is just and equitable to allow the prayer of the applicant. It is hereby declared that not only it is just and equitable but because of the fact that no asset is available for the purpose of 'Liquidation', this is a fit case for order of dissolution. The corporate debtor M/s. Ajaz Nanda Designs Private Limited, stands 'Dissolved' from the date of this Order - Since the Company stands Dissolved vide this order and no proceedings are now pending, therefore the Registry is directed that the case file of proceedings be closed and be consigned to records. Application allowed.
Issues:
Application for early dissolution of a corporate debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016. Analysis: The judgment pertains to an application filed by the liquidator of a corporate debtor seeking early dissolution under Section 54 of the Insolvency and Bankruptcy Code, 2016, read with Regulation 14 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The case originated from an application filed by a financial creditor for the initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, which subsequently led to the appointment of the applicant as the Resolution Professional. The Resolution Professional faced challenges as the ex-directors of the corporate debtor did not cooperate, leading to difficulties in conducting the CIRP. Due to the absence of assets, records, and cooperation, the decision to liquidate the corporate debtor was taken unanimously in a meeting, and the liquidation application was approved, appointing the applicant as the liquidator. The applicant highlighted the lack of records, including books of account, financial statements, and details of assets, making it impossible to proceed with the liquidation process. The applicant also mentioned the invocation of securities by the sole financial creditor against personal/corporate guarantors. Referring to a previous order from the Bangalore Bench, the applicant emphasized the objective of the Code to resolve issues promptly, either through a Resolution Plan or dissolution of the corporate debtor. The applicant relied on Regulation 14 of the Liquidation Process Regulations, which allows for early dissolution if the realizable properties are insufficient and no further investigation is required. Considering the circumstances, the Tribunal found that continuing the liquidation process was not feasible due to the absence of assets, documents, records, and personnel of the corporate debtor. The Tribunal concluded that the case fell within the provisions of Section 54 of the IBC and Rule 14 of the Liquidation Regulations, justifying the prayer for early dissolution. Consequently, the Tribunal ordered the dissolution of the corporate debtor from the date of the order, directing the closure of the case file and updating the status with the concerned authorities and the Registrar of Companies. The judgment emphasized the importance of efficient resolution or dissolution of corporate debtors in cases where no assets are available for liquidation, ensuring the swift conclusion of insolvency proceedings.
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