2019 (8) TMI 1244 - Tri - Insolvency and Bankruptcy

Company's Petition for Dissolution Granted under Insolvency and Bankruptcy Code

In Re : Guntur Tobacco Limited

The Company's petition for dissolution under Section 59 of the Insolvency and Bankruptcy Code, 2016 was granted. The Company, engaged in the tobacco ... Dissolution of the Corporate Person - Section 59 of the Insolvency and Bankruptcy Code, 2016 read with the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) - whether the liquidator has complied with all the provisions of Section 59 of the IB Code, 2016 read with Regulation 3 of the Regulations before initiating voluntary liquidation of the company? HELD THAT:- It is on record that the board of directors have passed necessary resolution on 16.09.2017 to liquidate the company voluntarily and the directors have also executed the Declaration of Solvency dated 16.09.2017 by way of an affidavit in terms of provisions of Section 59(3)(a) of the IB Code, 2016 - The Company has issued notice to all the shareholders and an Extraordinary General Meeting was also held on 16.10.2017 in which the approval for liquidating the company was also given. The Company has also filed MGT 14 informing the special resolution passed by the members to the ROC. The voluntary liquidator has complied with the requirement of the provisions of section 59 of the IB Code, 2016 and filed this Petition under section 59(7) of the IB Code, 2016 to dissolve the Petitioner/Corporate Person viz., Guntur Tobacco Limited. M/s. Guntur Tobacco Limited is ordered to be dissolved as envisaged under Section 59 of the Code with effect from the date of this Order. It is also directed the Company to transfer the unclaimed amount lying in the Bank Account should be transferred to “the Companies Liquidation Account in the Public Account of India”. Issues:Company petition for dissolution of Corporate Person under Section 59 of the Insolvency and Bankruptcy Code, 2016.Analysis:The Company under voluntary liquidation, engaged in the tobacco business, filed a petition for dissolution under Section 59 of the Insolvency and Bankruptcy Code, 2016. The Company's authorized capital was Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each, with a paid-up capital of Rs. 5,72,612. The Company ceased its tobacco business due to financial constraints and proposed voluntary liquidation. The Board of Directors passed a resolution for voluntary wind-up, and majority directors declared solvency. The Company held an Extra-Ordinary General Meeting, passing a special resolution for voluntary liquidation and appointing an Insolvency Professional as the liquidator.The liquidator made a public announcement for liquidation and opened a bank account for payments. The liquidator complied with regulatory requirements, including filing reports and obtaining necessary approvals. The Company had no creditors at the time of filing the petition. The liquidator also informed the Income Tax Authorities and made necessary tax payments. A detailed account of payments, dividends, and unclaimed amounts was presented. The liquidator submitted preliminary and final reports as required by regulations.The Registrar of Companies confirmed the compliance of the Company with necessary filings and resolutions. The Adjudicating Authority reviewed the compliance with Section 59 of the IB Code, ensuring all requirements were met. The directors' resolution, shareholder approval, and public announcements were found to be in order. The liquidator fulfilled all obligations under the Code and Regulations, leading to the order for dissolution of the Company. The unclaimed amount in the bank account was directed to be transferred to the Companies Liquidation Account in the Public Account of India. The petition was disposed of, with the liquidator instructed to file the order with the ROC within 14 days.