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TMI Blog2020 (11) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... Facts in brief are that the Operational Creditor, M/s. Shri Ram Lime Products Pvt. Ltd. had filed an Application bearing no. IB-250(ND)/2017 under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. Gee Ispat Pvt. Ltd. The said Application was admitted by this Tribunal vide Order dated 24.8.2017 and Ms. Pooja Bahry was appointed as the Interim Resolution Professional (IRP). 4. That, no Expression of Interest was received for submitting Resolution Plan during the CIR period and subsequently, the CoC unanimously voted and decided to liquidate the Corporate Debtor. That on the basis of CA-63/C-II/2018, this Adjudicating Authority vide its Order dated 5.10.2018 had initiated Liquidation Process of the Corporate Debtor under Section 33(1) of the I & B Code, 2016, and as per recommendation of CoC, appointed Ms. Pooja Bahry as the Liquidator of the Corporate Debtor. 5. While submitting the Final Report, the Applicant has submitted that all the assets of the Corporate Debtor "Gee Ispat Pvt. Ltd." have been disposed of through sale/auction and the distribution of the realizable amount from the sale/auction of all the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an investigation." 8.2.3 We therefore, order that the affairs of the Corporate Debtor ought to be investigated. Accordingly, the Central Government shall order an investigation into the affairs of the Corporate Debtor under Section 210(2) of the Companies Act, 2013." 9. It is further added by the Applicant that the above-mentioned order was challenged in an Appeal in the Hon'ble NCLAT in Company Appeal (AT) Insolvency No. 949 of 2019, which vide its Judgement dated 04.02.2020 held the following : "44. Be that as it may, this Tribunal on a careful consideration of respective contentions and also keeping in mind a prime fact that the Tribunal/Adjudicating Authority is guided by the Principles of Natural justice and is to follow the procedure prescribed u/s 213(b) of the Companies Act comes to an 'irresistible' and inescapable conclusion that the Adjudicating Authority (Tribunal) in Law is not empowered to order an investigation directly, to be carried out by the Central Government. An Adjudicating Authority (Tribunal) as a competent/Appropriate authority in terms of Section 213 of the Companies Act has an option to issue notice in regard to the charges/ allegations l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46. The Office of Registry is directed to communicate a copy of this order to the Secretary and Joint Secretary, Ministry of Corporate Affairs, 5th Floor, 'A' Wing, Shastri Bhawan, Dr. R.P. Road, New Delhi-110001 for information and necessary follow up action." 10. It is also submitted by the Applicant that till date, no investigation has been started by the Ministry of Corporate Affairs and the Liquidator has not even been contacted by them to provide any information /documents etc. 11. It is further submitted by the Applicant that it had communicated the directions of the Hon'ble NCLAT to ROC and MCA vide its Post dated 05.02.2020. It is added that they were also informed vide email dated 04.02.2020. However, no action has been taken till date. 12. That in the view of the above, the issue which arise and needs to be addressed before adjudicating the Application of Dissolution on merits is : "Whether the pendency of any Investigation on the Corporate Debtor creates a bar for passing on order of dissolution of a Company ? 13. It is submitted by the Applicant that the Regulation 44 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision when dissolution takes place by virtue of Section 248 of Companies Act 2013, such exception cannot be presumed to be available as a thumb rule in situations when dissolution takes place via other modes especially under the I & B Code, 2016, where no such provision is expressly available. 18. Further, in exercise of the powers conferred by sub-sections (1), (2) and (4) of Section 248 read with Section 469 of the Companies Act, 2013 the Ministry of Corporate Affairs vide its Notification dated 26th December, 2016 notified the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, which in the Rule 3(1)(IV) provides : "3. Removal of name of company from the Register on suo-motu basis - (1) The Registrar of Companies may remove the name of a company from the register of companies in terms of sub-section (1) of section 248 of the Act : Provided that following categories of companies shall not be removed from the register of companies under this rule and rule 4, namely :- (i) .......................... (ii) ................................. (iii).......................... (iv)companies where inspection or investigation is ordered and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority....." 22. Thus, from the above discussion, it is clear that the dissolution puts an end to the legal existence of a Company. Once a company is dissolved, it becomes a non-existent party and therefore, no action can be brought in its name. Further, the Liquidator shall also not be able to represent the non-existent Corporate Debtor before any of the investigating forum. 23. Moreover, in case any recovery is effected or an asset is recovered through the investigation, the same needs to be vested in the Corporate Debtor. However, if the Corporate Debtor is dissolved, the dissolved status of the Corporate Debtor will create an impediment in vesting such assets and benefits to the Corporate Debtor. 24. The Section 54(1) of the IBC Code 2016 makes it mandatory for the Liquidator to make an application for dissolution on the occurrence of the event, when the assets of the Corporate Debtor are completely liquidated. The contents of the Section 54 are reproduced below : 54. Dissolution of corporate debtor. (1) Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Corporate Debtor should not be dissolved at this stage when the investigation as ordered by Hon'ble NCLAT is pending. 27. Hence, we are of the view that the pendency of an investigation creates a bar in ordering dissolution of the company. We, therefore, do not consider that at the present stage, the situation is ripe for dissolution of the Corporate Debtor viz., Gee Ispat Pvt. Ltd. 28. The Application is accordingly dismissed as premature. However, liberty is granted to the Applicant to make an appropriate application of dissolution in accordance with law after closure of the investigation ordered by Hon'ble NCLAT vide Judgement dated 04.02.2020. 29. That, however, the status report filed by the Applicant is taken on record subject to just exceptions. 30. Ministry of Corporate Affairs, Government of India is also directed to expedite investigation into the affairs of the Corporate Debtor in terms of the Judgement dated 04.02.2020 passed by Hon'ble NCLAT. The Registry and Liquidator are directed to communicate a copy of this order within a week to the Secretary, Ministry of Corporate Affairs, 5th Floor, 'A' Wing, Shastri Bhawan, Dr. R.P. Road, New De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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