2019 (7) TMI 978 - Tri - Insolvency and Bankruptcy

Company's Voluntary Liquidation Petition Granted Under Insolvency and Bankruptcy Code

The Tribunal allowed the petition for voluntary liquidation, confirming compliance with Section 59 of the Insolvency and Bankruptcy Code, 2016. The ... Admissibility of petition - Voluntary liquidation - Section 59 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Board of Directors of the Company has taken a conscious decision to close down the company due to non-availability of business prospects and non-availability of long-term financial resources, thus, as per them, it would not be a wise decision to carry on the business activities of the company from the economic point of view. Therefore, Company’s Board of Directors proposed to liquidate the company voluntarily by invoking the provisions of Section 59 of the IBC. It is also made clear through the present petition that the Applicant Company is having no creditors, i.e. either secured creditors or unsecured creditors. Thus the company was having its own resources and net worth, which are already distributed/apportioned of among its shareholders. The company has duly passed necessary Special Resolution in its Extra Ordinary General Meeting (EOGM) on 7.04.2018 by confirming the decision of its Board of Directors by proposing its Voluntary Liquidation - the Liquidator, after his appointment duly performed his duties and completed necessary formalities so as to complete process of liquidation, which are well narrated in the present petition and thereafter he sought an order from this Tribunal for dissolution of the applicant company. Since nothing adverse is found from the material available on record in respect of opposing the proposed liquidation of the corporate person, the present application deserves to be allowed - petition allowed. Issues Involved:1. Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.2. Compliance with procedural requirements for voluntary liquidation.3. Appointment and actions of the liquidator.4. Communication and notifications to statutory authorities.5. Final dissolution of the company.Issue-wise Detailed Analysis:1. Voluntary Liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016:The petition was filed by the liquidator on behalf of the applicant company seeking voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The Board of Directors decided to close down the company due to non-availability of business prospects and long-term financial resources, making it financially unviable to continue operations.2. Compliance with Procedural Requirements for Voluntary Liquidation:The applicant company complied with the statutory provisions of Section 59. The Board of Directors passed a resolution for voluntary liquidation in an Extraordinary General Meeting (EOGM) held on 7th April 2018. A declaration was made by the Director on 13th March 2018, accompanied by audited financial statements and records of business operations for the previous two years. The declaration was filed with the Registrar of Companies, Gujarat, in form GNL-2 on 16th April 2017.3. Appointment and Actions of the Liquidator:Mr. Keyur J. Shah, a practicing Company Secretary and Insolvency Professional, was appointed as the liquidator. The liquidator performed all necessary duties, including making a public announcement of the commencement of liquidation, opening a bank account for realization and payment, submitting a preliminary report, and obtaining a 'No Objection Certificate' from statutory authorities. The liquidator also distributed the corpus among the members and submitted the final report to the Registrar of Companies and IBBI.4. Communication and Notifications to Statutory Authorities:The liquidator communicated the commencement of liquidation and appointment to the Registrar of Companies, Gujarat, and IBBI. The necessary forms (MGT-14 and GNL-2) were filed and approved. Public announcements were made in newspapers and on the IBBI website. The liquidator also informed the Income Tax Department and other statutory authorities, surrendering various registration certificates.5. Final Dissolution of the Company:No objections were received from shareholders, creditors, or the public. There were no adverse comments from the Central Government or other authorities. The company was not involved in any business activities affecting public interest. The liquidator complied with all procedural requirements, including filing the final report and obtaining necessary certificates. Consequently, the Tribunal ordered the dissolution of the company with effect from 2nd May 2019, directing the liquidator to communicate this order to relevant statutory authorities within fourteen days.Conclusion:The Tribunal allowed the petition for voluntary liquidation, confirming that all procedural requirements under Section 59 of the Insolvency and Bankruptcy Code, 2016, were met. The company was ordered to be dissolved, and the liquidator was instructed to notify the Registrar of Companies, Gujarat, and IBBI. The petition was disposed of accordingly.