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TMI Blog2024 (10) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have been taken as per the scheme of the IBC. The facts of the present case indicate that CIRP has been completed without any Plan having been received, inspite of Form- G published twice. The Adjudicating Authority did not pass any order for liquidation, which could have been passed under Section 33, sub-section (1). Thus, the CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54, could not have been taken by the RP. In the present case, the RP could have intimated the Registrar of Companies for striking off the name of the Company. In the facts of the present case, where company is not carrying on any business and there are no assets of the Company, dissolution of the Company under Section 54, is a step, which could have been taken as per the statutory scheme of the IBC. This Tribunal s judgment in Shyson Thomas [ 2023 (6) TMI 102 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI ] was a case where Adjudicating Authority exercising its jurisdiction has directed for dissolution by allowing the application - In the present case, the Adjudicating Authority had rejected the application, relying on the provisions of Section 54 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of claim was mentioned in Form-B as NIL . (iii) The first Meeting of the CoC was held on 08.12.2023. The CoC noticed the claims received from the Financial Creditors. The Suspended Director of the Corporate Debtor was also present in the Meeting. The IRP was approved as RP. RP was permitted to incur expenses for the valuation of the assets of the Corporate Debtor. The Valuation Report was submitted reporting that cash and bank balance of the CD is only Rs.1,535/-. No other assets were noted or valued. (iv) The second CoC Meeting was held on 06.01.2024, where a decision was taken to invite Expression of Interest ( EoI ) and further not to conduct a transaction/ forensic audit of the Company. The publication of Form-G was approved. The Information Memorandum was also published attaching the financial statements for Financial Years 2021-22 and 2022-23. Cash balance was mentioned as Rs.84 and total cash and cash equivalents was mentioned as Rs.1,451/- (v) The third Meeting of the CoC was held on 06.02.2024, where it was noted that Form-G did not fetch any EoI. However, it was decided to take one more effort for fetching EoI. Form-G was published again and no EoI was received. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for dissolution filed by the RP under the resolution of the CoC. It is submitted that when CoC is not ready to bear the liquidation cost and the CD has no assets to be liquidated, filing of liquidation application will further burden the CoC. It is submitted that observation of the Adjudicating Authority in the impugned order the cash and cash equivalent as on that date were Rs.1,44,880/- , which is the amount contributed by the CoC for meeting the CIRP cost and the reliance on the said amount was wholly incorrect. It is submitted that in the special facts and circumstance of present case, dissolution was only option left and the Adjudicating Authority committed error in rejecting the Application. 5. The learned Counsel for the CoC has also supported the submissions of the Appellant. It is submitted that CoC, who resolved to file application for dissolution instead of a liquidation, since neither the CD has the assets, nor there are any amount available to bear the cost of liquidation. 6. We have considered the submission of learned Counsel for the parties and have perused the records. 7. We have already noticed the above that the valuers were appointed by the RP in pursuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER AND JANAK SHAH BE APPOINTED AS A LIQUIDATOR OF THE CD TO CARRY OUT LIQUIDATION PROCESS. The member of the COC voted against the above resolution therefore the above resolution is not passed. 8. Under Agenda Item No.5 discussion regarding Regulation 39B, 39BA, 39C and 39D of IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016 was taken, where it was resolved that Corporate Debtor be dissolved and application in this regard be made before the Adjudicating Authority. The Minutes regarding dissolution at Agenda Item No.5 is as follows: 5) TO DISCUSS REGARDING THE REGULATION 398. 39BA. 39C 39D OF INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS. 2016:- The RP informed the COC that in the facts of the case of the CD requisite resolutions as per regulations 39B, 39BA, 39C 39D regarding estimation of liquidation cost, the arrangement for meeting of the said liquidation cost, assessment of compromise or arrangement or assessment of sale as a going concern, fixing the fee of liquidator etc. are required to be consider by the COC and vote in this regard. The members of the COC informed the RP that since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he may apply, along with a detailed report incorporating the views of the consultation committee, to the Adjudicating Authority]for early dissolution of the corporate debtor and for necessary directions in respect of such dissolution. 11. The Adjudicating Authority in the impugned order in paragraph 16 of the judgment has made the following observations: 16 (c) Upon a comprehensive examination of Regulation 14 of the IBBI (Liquidation Process) Regulations and Section 54 of the Insolvency and Bankruptcy Code, 2016, this Tribunal observes that only the Liquidator is empowered to make an application to the Adjudicating Authority for the dissolution of a Corporate Debtor. As the liquidation process has not yet commenced in this matter, there is no specific provision that authorizes an early dissolution prior to the initiation of liquidation. d) It has been observed that the Applicant, in his capacity as the Resolution Professional, has submitted a compliance certificate under Form-H in accordance with Regulation 45(3) of the IBBI (Liquidation Process) Regulations. Additionally, the Applicant has designated himself as the Liquidator under Annexure-S of this application. However, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CIRP period, we fail to see any reason for direction of transaction audit as directed by the Adjudicating Authority. The liquidation value of the CD was already obtained, which was Rs.1,535/- only. There was no cash or cash balance except of a meagre amount of Rs.1,451/- no other assets were found and CIRP having come to an end, direction by the Adjudicating Authority dated 11.06.2024 for transaction audit is unsustainable and is set aside. 16. Now we come to the application filed by the Appellant praying for dissolution of the CD, which has been rejected by the impugned order. The Adjudicating Authority in the impugned order has referred to Section 54 of the IBC, which contemplate making an application to the Adjudicating Authority for the dissolution, where the assets of the Corporate Debtor have been completely liquidated. In the present case, the Adjudicating Authority has neither directed for any liquidation, nor liquidation has actually been conducted. 17. The learned Counsel for the Appellant has placed reliance on the judgment of this Tribunal, Chennai Bench in Shyson Thomas (supra), which was a case where Promoter/ Director of the CD had filed the Appeal challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The submission, which was advanced by the RP before this Tribunal was that commercial wisdom of the CoC need no interference and the Adjudicating Authority in exercise of inherent jurisdiction can dissolve the CD in the facts of the case. In the present case, the Adjudicating Authority has not exercised its jurisdiction in allowing the application filed by the CD for dissolution referring to Section 54 of the IBC and Regulation 14 of the Liquidation Regulations. The scheme of the IBC clearly provides that dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. In the present case, the liquidation proceedings have not been undertaken and resorting to Section 54 could not have been taken as per the scheme of the IBC. The facts of the present case indicate that CIRP has been completed without any Plan having been received, inspite of Form- G published twice. The Adjudicating Authority did not pass any order for liquidation, which could have been passed under Section 33, sub-section (1). Thus, the CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54, could not have been taken by the RP. 19. Under the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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