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TMI Blog2019 (12) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... as there is no liquidation assets left over for payment to the Income Tax Deptt. Matter disposed off. - I.A. No. 374/NCLT/AHM/2019 in C.P. (LB.) No. 21/10/NCLT/AHM/2017 - - - Dated:- 18-12-2019 - Harihar Prakash Chaturvedi, Member (J) And Prasanta Kumar Mohanty, Member (T) For the Appellant : Kamya Shah, Advocate For the Respondents : Rajesh Bohra, Advocate ORDER Prasanta Kumar Mohanty, Member (T) 1. The present Interlocutory Application No. 374 of 2019 filed by Mr. Premraj Ramratan Laddha, Liquidator of New Tech Forge And Foundry Limited under Section 54(2) of Insolvency and Bankruptcy Code, 2016 in CP (IB) No. 21/10/NCLT/AHM/2017 on 24/4/2019 against the Financial Creditors, State Bank of India, Oriental Bank of Commerce, Corporation Bank, State Bank of Hyderabad and International Assets Management Co. Ltd., praying for the following reliefs - A. This Hon'ble Tribunal may be pleased to pass appropriate orders/directions to Order dissolution of the Corporate Debtor i.e. M/s. New Tech Forge Foundry Limited under Section 54(2) of the Code; B. This Hon'ble Tribunal may be pleased to release the closing balance in liquidation bank accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders along with the details of each stakeholder, whether secured or unsecured was prepared and filed before the Hon'ble Adjudicating Authority on 29/01/2018. c) Further, during the quarter ending on 31/12/2017 and from the date of commencement of liquidation i.e. 12/12/2017 there was no receipt and payment of any other amount except the cost for public announcement for liquidation process published in newspaper amounting to ₹ 28,173/-. d) A bank account in the name of 'New Tech Forge Foundry Limited, in Liquidation' bearing No. 37457053630 was opened with State Bank of India, Commercial Branch, Ahmedabad. The balance in the said account as on 20.04.2019 is ₹ 2,07,197.00 and ₹ 18,00,000.00 lying in Fixed Term Deposit Account No. 0038395753054 with the said bank. e) Further, the Liquidator, under Regulation 15 of the Insolvency and Bankruptcy Board of India Regulations, prepared and 1st progress report dated 15/01/2018 and a Preliminary Report within 75 days was submitted before the Adjudicating Authority on 26/02/2018. An Asset Memorandum within 75 days from the liquidation commencement was prepared and submitted before the Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance of ₹ 35.92 Crores lying in the Liquidation Bank Account, following amount was distributed by the Liquidator to the stakeholders in accordance to Section 53 of the Insolvency and Bankruptcy Code, 2016 - Sr. No. Secured Creditor Amount(Rs. ) 1. State Bank of India 30,60,600/- 2. Oriental Bank of Commerce 10,67,400/- 3. Corporation Bank 10,92,000/- 4. International Asset Reconstruction Company 7,80,000/- Total 60,00,000/- k) Further, ₹ 92.00 Lakhs is kept in reserve to meet the cost of liquidation, fee of liquidator, refund of TDS, if any deducted and paid by purchaser, fee of auditors, Valuer, Advertisement agency, consultants, advocates and any other contingent expenses, Liquidation expenses amounting to ₹ 55,630/- were paid by the liquidator during the quarter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Auditor i.e. M/s. ACM Associates observing no adverse transaction are found during the transaction audit for two years i.e. 01/04/2015 to 29/05/2017 before the date of commencement of CIRP. Further, for the quarter ending on 31/12/2018, the liquidator had paid liquidation expenses amounting to ₹ 5,25,980/-. o) In the 6th progress report for the quarter ending on 31/03/2019, the liquidator has appointed following professionals- i. M/s. HSVJ Co., Ahmedabad (CA) - for audit of the liquidator's account for the year ended on 31/03/2019 and filing Income Tax returns for AY 2019-2020. ii. M/s. Nanavati Associates (Advocates) - for preparing, filing and final disposal of the dissolution application. iii. Mr. Hiren J. Trivedi(Advocate) - for representing the liquidator in applications filed by the State 5. Further, the following are the pending matters in relation to this Corporate Debtor - i. Appeal bearing No. 591080 preferred by the Corporate Debtor before CIT, Rajkot against the assessment order for AY 2009-2010 under Section 143(3) read with 147 of Income Tax Act. ii. Appeal bearing No. 334911 preferred by the Corporate Debtor before CIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal under Section 42 of IBC Code challenging the order dtd: 26.06.2018 passed by the Liquidator under Section 40 whereby, the claim of the appellant has been accepted but, announcing the received amount of claim as Nil. It is submitted that in light of the order dtd: 12.12.2017, whereby this Tribunal ordered the liquidation of the Corporate Debtor and appointment of liquidator, the claim can be submitted as per the Limitation Act, Article 137 within a period of three years. It is also submitted that Applicant has filed the captioned appeal challenging the order dated 26.06.2018 passed by the liquidator under Section 40 whereby, the claim of the Applicant has been accepted but, announcing the received amount of claim as Nil, due to undervaluation of assets by Liquidator. The Liquidator, in his reply, submitted that the last date of submission of claim before the IRP was 14.06.2017, whereas the claim was lodged by the present applicant on 25.01.2018 i.e. after the date of order of liquidation passed by this Tribunal. Hence, the Applicant does not have any locus to approach this Tribunal after the order of liquidation. Further, in compliance of Regulation 31 of IBBI, a cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 in CP(IB) 21 of 2017 - The said application is filed by the State Tax Officer (3), Applicant herein praying to set aside the order dtd: 26.06.2018 and to consider the unpaid dues of the Applicant as secured dues of the Government, against which the Respondent No. 1 has filed its reply on 26.03.2019, wherein it is submitted that the claim are required to be filed in Form C as per the Code and moreover the Central Govt. and State Govt. claims will be 6th in rank priority of the order for distribution of assets. It is further submitted that the claim was lodged on 25.01.2018, whereas the last date of submission of claim before the IRP was on 14.06.2017. 6.5 IA 107 of 2019 in CP(IB) 21 of 2017 - The said application is filed by the State Tax Officer(3), Applicant herein is praying to condone the delay of 220 days in preferring the appeal, against which the Respondent No. 1 has filed its reply on 26.03.2019. 6.6 I.A. No. 143 of 2019 in CP(IB) No. 21 of 2017 - The said application is filed by M/s. Haq Steels Metaliks Limited, the buyer of the property sold by the Liquidator, under Section 60(5) of the Code with a prayer to give necessary directions to remove the attachment/c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Board of India Regulations regarding the liquidation process and liquidation of assets of Corporate Debtor. 9. It is submitted that assets of the Corporate Debtor have been liquidated and there is being no further assets to be utilized for recovery of the dues of the creditors/stakeholders and the assets sale monitoring Committee has confirmed that the Liquidator may proceed for dissolution of the Corporate Debtor. Accordingly, the said application has been preferred for appropriate directions under Section 54 of the code. It is pointed out that the balance in Liquidation Bank Account with State Bank of India as on 20.04.2019 is ₹ 2,07,197/- and ₹ 18,00,000/- is lying in Fixed Term Deposit Account No. 0038395753054 with the said Bank. 10. The Petitioner/Liquidator, in his Preliminary Report dated 22.02.2018 has already stated that the operation of the Corporate Debtor has been closed since the year 2010 and company is not a going concern and the liquidator has not yet come across any information which requires further inquiry. Further, following observations were recorded - 10.1 Issued, subscribed and paid up share capital of the Corporate Debtor was ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards liquidation fees, legal charges, various cost incurred during the liquidation process, payment to various creditors and Income Tax liabilities of the company. 12. The Final Report dated 20.04.2019 (page 217 to 219 of the paper book) has been annexed as Annexure ZB on the liquidation accounts of the company, shows receipts and payments pertaining to liquidation since liquidation commencement date i.e. 12.12.2017 till 20.04.2019. It is further recorded in the auditor's Final Report that: 12.1 It is stated that old bank accounts of the Corporate Debtor maintained were closed and new account in the name of 'New-tech forge and Foundry Ltd. in liquidation' was opened on 05.01.2018 at SBI Commercial Branch, Ahmedabad and all the balances of old bank account were transferred into the new account. 12.2 It is stated that the factory premises of the Corporate Debtor including land building plant machinery has been sold through e-auction process held on 08.03.2018 and sale deed/sale certificate was executed on 28.03.2018 to handover the possession of the said properties to buyer. It is stated that the Corporate Debtor had closed business operation since last sever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act. Claim submitted by the Income Tax Dept. to the Liquidator for the assessment year 2012-13. 18. Appeal No. 2 of 2019 in CP(IB) 21 of 2017 before this Adjudicating Authority filed by State Tax Officer V/s. Premraj Ramratan Laddha Ors. The said application is filed by the State Tax Officer (3), Applicant herein seeking condonation of delay of 220 days in preferring the appeal under Section 42 of IBC Code challenging the order dtd: 26.06.2018 passed by the Liquidator under Section 40 whereby, the claim of the appellant has been accepted but, announcing the received amount of claim as Nil. 19. Appeal No. 3 of 2019 in CP(IB) 21 of 2017 before this Adjudicating Authority filed by State Tax Officer V/s. Premraj Ramratan Laddha Ors. The said appeal is filed under Section 42 of the Insolvency and Bankruptcy Code, 2016 by the State Tax Officer (3), Applicant herein to oppose the distribution from sale of liquidation by Respondent No. 1 - Liquidator for M/s. New Tech Forge and Foundry Ltd., praying to set aside the order of the Respondent No. 1 dated 26.06.2018 and to consider the unpaid dues of the Applicant as secured dues towards Government outstanding. It is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding the liquidation commencement date; (ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest;................. Further, the Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Ors., Civil Appeal No. 8766-67 of 2019 held a view with regard to the priorities of claims and the position of the Secured Financial Creditors, Operational Creditors etc., in distribution of assets of the Corporate Debtor. The dues of the Government are not considered as a secured debt under Section 3(31) of the Code, do not get precedence over secured creditors under Section 53 and do not fall in Clause(b) of Section 53, but fall under Clause(e) of Section 53. Hence, it is clear that amount dues to the Central Govt. and State Govt. shall be paid after the dues of the financial secured creditors are paid. In this case, the admitted dues of the secured creditor were ₹ 139.60 Crores, whereas the liquidation proceeds of ₹ 35.60 crores could only satisfy 25.5% of the secured financial creditor's admitted dues. Hence, there is no assets available for payment of dues of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted claim amount. 28. M/s. Haq Steel Metallik Private Ltd., erstwhile M/s. Haq Enterprises Pvt. Ltd., bought the property being Land(factory premises) through e-auction as the highest bidder and paid ₹ 35.70 Crores. The State Bank of India, being the lead bank of the secured lenders was in possession of the assets of the Corporate Debtor pursuant to the various proceedings initiated under the SARFAESI Act and all the lenders relinquished their security interest in the assets of the Corporate Debtor under Section 52 of the Code. The said e-auction was being monitored by the Financial Creditor, SBI and Corporation Bank on behalf of all stakeholders. The proceeds have been distributed as per Section 53 of Insolvency and Bankruptcy Code, 2016 and the liquidator has already executed sale deed of the property in favour of the buyer, M/s. Haq Steel Metallik Private Ltd. Hence, the prayer made by the buyer in I.A. No. 143 of 2019 is admitted to the extent that the concerned Dept. of the State Government is directed to remove the attachment/charge on the properties of the Corporate Debtor already sold on 26.03.2018 under e-auction by the liquidator from the Register m ..... 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