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TMI Blog2021 (11) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... s report along with revised list of stakeholders of the Corporate Debtor. Further, Liquidator also directed to take steps towards completion liquidation of the Corporate Debtor in time bound manner then start distribution in one go. Application disposed off. - IA No. 977/MB/C-II/2021 In C.P (IB) No. 1832/MB/C-II/2017 - - - Dated:- 10-11-2021 - Hon ble Member (Judicial) : Mr. Ashok Kumar Borah And Hon ble Member (Technical) : Mr. Shyam Babu Gautam For the Applicant : Mr. Zal Andhyarujina, Counsel For the Respondent : Mr. Pulkit Sharma, Counsel ORDER Per: Shyam Babu Gautam, Member (Technical) 1. The present application is moved by IDBI Bank Limited (hereinafter called as the Applicant ) against the Liquidator of the EPC Constructions India Limited (hereinafter called as the Corporate Debtor ) Mr. Abhijit Guhathakurta (hereinafter referred to as Liquidator ) Under Section 60(5) of Insolvency and Bankruptcy Code, 2016. The Applicant has prayed for grant of following reliefs. (a) That this Tribunal be pleased to direct the Respondent to permit the Financial Creditors of the Corporate Debtor to distribute an amount of INR 223 crore from the cash bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant filed an Additional Affidavit dated 16th July 2021, suitably modifying the prayers as follows a. That this Hon ble Tribunal be pleased to direct the Respondent, in his capacity as the Liquidator, to distribute the available cash balances of the Corporate Debtor, amongst the stakeholders of the Corporate Debtor in favour of whom the same are charged, including the Applicants herein, as per the waterfall mechanism set out in Section 53 of the Code; and amongst the workmen of the Corporate Debtor as required under Section 53(1)(b)(i) of the Code, after accounting for the costs/ reserving the estimated costs under Section 53(1)(a) - insolvency resolution process costs and liquidation costs; 6. The Liquidator has, vide its Reply dated 3rd August 2021, stated that that he does not have any objection to distribution of surplus cash balance of the Corporate Debtor up to an extent of ₹ 220 crores amongst the stakeholders in accordance with the order of priority and in the manner specified under Section 53 of the I B Code, subject to an undertaking that, if there is any shortfall in meeting the requirements of the liquidation process, the amounts shall be repleni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by a third party which are in possession of the corporate debtor, including - (i) assets held in trust for any third party; (ii) bailment contracts; (iii) all sums due to any workmen or employee from the provident fund, the pension fund and the gratuity fund; (iv) other contractual arrangements which do not stipulate transfer of title but only use of the assets; and (v) such other assets as may be notified by the Central Government in consultation with any financial sector regulator; (b) assets in security collateral held by financial services providers and are subject to netting and set-off in multi-lateral trading or clearing transactions; (c) personal assets of any shareholder or partner of a corporate debtor as the case may be provided such assets are not held on account of avoidance transactions that may be avoided under this Chapter; (d) assets of any Indian or foreign subsidiary of the corporate debtor; or (e) any other assets as may be specified by the Board, including assets which could be subject to set-off on account of mutual dealings between the corporate debtor and any creditor. 8. Under Section 35(j) of the Code, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders, if any; and (h) equity shareholders or partners, as the case may be. (2) Any contractual arrangements between recipients under sub-section (1) with equal ranking, if disrupting the order of priority under that sub-section shall be disregarded by the liquidator. (3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction. Explanation. For the purpose of this section- (i) it is hereby clarified that at each stage of the distribution of proceeds in respect of a class of recipients that rank equally, each of the debts will either be paid in full, or will be paid in equal proportion within the same class of recipients, if the proceeds are insufficient to meet the debts in full; and (ii) the term workmen s dues shall have the same meaning as assigned to it in section 326 of the Companies Act, 2013 (18 of 2013). 10. By the present Applicant, the Applicant volunteers that the cash balance may be distributed in the priority as set out in Section 53 of the Code. As such, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the list of creditors and asset memorandum. In the present matter, the Applicant verily believes that the same has been filed before this Tribunal on 17th July 2021 and 3rd August 2021 respectively. 13. Further, in the present case, the Liquidator vide its Reply has stated that, the Corporate Debtor has a balance of approximately ₹ 300 crores in its bank accounts, which includes funds received from invocation of performance bank guarantee of ₹ 42 crores. In addition, there is additional margin money of approx. ₹ 13 crores also available. The Corporate Debtor further also generates approximately ₹ 6 7 crores in cash every month. The Respondent submits that therefore, out of the balance of ₹ 300 crores and taking into account the estimates costs and expenses, the amount of ₹ 220 crores ought to be distributed to the stakeholders, in accordance with provisions of the Code. 14. Without prejudice to the aforesaid, the Applicant undertakes that in the event of any shortfall in meeting the requirements involved in the liquidation process, the Applicant (including itself and all other lenders) agree and undertake to replenish the deficit amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of hearing on 07.09.2021 before this Tribunal. 19. The rationale / reason, basis which the Respondent / Liquidator herein has arrived at the aforementioned conclusion are, inter alia, as under a. As per records, Corporate Debtor has a balance of approximately INR 300 (three hundred) crores in its bank accounts which includes funds received from invocation of performance bank guarantee of INR 42 (forty-two) crores. In addition, there is additional margin money of approx. INR 13 (thirteen) crores also available. The Corporate Debtor further also generates approximately INR 6-7 crores in cash every month. b. Most of the business of the Corporate Debtor is non-functional. Only the equipment leasing division of the Corporate Debtor is operational. All the other division of the Corporate Debtor are being utilized for recovery of dues. The Corporate Debtor at present has a total 109 employees along with 14 employees serving notice period and superannuation. The Respondent estimates that, the process of liquidation, in all likelihood, subject to other external factors should be completed within a year. Therefore, as per the estimate of the liquidator, the cost of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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