2021 (6) TMI 844 - Tri - Insolvency and Bankruptcy

Tribunal Orders Corporate Debtor Dissolution: Liquidation Process Validated

Global Rural Netco Limited Versus Evershine Advisory Services Private Limited

The Tribunal ordered the dissolution of the Corporate Debtor after a thorough review of the insolvency and liquidation process. Despite efforts to find a ... Seeking dissolution of the Corporate Debtor - Sections 54 and 60(5) of the Insolvency & Bankruptcy Code, 2016 (the Code) read with Rule 11 of the National Company Law Tribunal Rules, 2016 - HELD THAT:- It appears that the affairs of the Corporate Debtor have been wound up and its assets have been completely liquidated. We are satisfied from the documents on record that the liquidation is not with intent to defraud any person. The bank account for the purpose of liquidation has been closed. The above facts and circumstances indicate that due process of liquidation, as per extant provisions and in the manner indicated in the Code and Regulations, have been followed by the Liquidator to liquidate the assets of Company and the realized amounts have also been distributed among the respective claimants. The liquidation process has been duly completed as per the provisions of the Code. Thus, it would be just and equitable for this Authority to dissolve the Corporate Debtor. No party is going to be adversely affected thereby. Application allowed. Issues Involved:Application for dissolution of the Corporate Debtor under Sections 54 and 60(5) of the Insolvency & Bankruptcy Code, 2016.Detailed Analysis:1. Background and CIRP Process: The Tribunal admitted a Company Petition under Section 7 of the Code for Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The Interim Resolution Professional (IRP) was appointed, and the IRP undertook various actions, including calling for claims and conducting meetings with the Committee of Creditors (CoC).2. Appointment of Resolution Professional and Valuers: The IRP was appointed as the Resolution Professional (RP) after the first meeting of the CoC. The RP engaged Registered Valuers and a Forensic Auditor to assess the Corporate Debtor's situation. The Information Memorandum was prepared and circulated among the CoC members.3. Initiation of Liquidation Process: Despite efforts to find a resolution plan, no viable option emerged, leading the CoC to unanimously decide to initiate the liquidation process against the Corporate Debtor. The Tribunal then directed the liquidation and appointed the Applicant as the Liquidator.4. Liquidation Process and Stakeholder Meetings: The Liquidator took charge, made public announcements, and informed relevant authorities about the liquidation. Claims were received and stakeholders were engaged through meetings. The stakeholders decided to file a Dissolution Application, which was subsequently done by the Applicant.5. Distribution of Assets and Closure: The Liquidator distributed the available funds to stakeholders as per the provisions of the Code. Bank accounts were closed, and undertakings were obtained from former Directors regarding pending litigation and liabilities. The Liquidator also sought clearance from the Income Tax Authority.6. Final Compliance and Dissolution: The Liquidator prepared the Final Report, complied with regulations, and submitted necessary documents to the authorities. The Tribunal, after reviewing the submissions and documents, found that the liquidation process was conducted properly without any intent to defraud. Consequently, the Corporate Debtor was dissolved, and the Liquidator was discharged.In conclusion, the Tribunal's detailed analysis and order reflect a comprehensive review of the entire insolvency and liquidation process, ensuring compliance with legal requirements and the fair distribution of assets to stakeholders before ultimately ordering the dissolution of the Corporate Debtor.