2021 (11) TMI 191 - Tri - Insolvency and Bankruptcy

Corporate Debtor Dissolution Granted: Liquidator's Payments & Discharge

The Tribunal granted the application for dissolution of the Corporate Debtor due to the lack of assets for liquidation and the inability to discharge ... Dissolution of the Corporate Debtor - seeking orders for payment and reimbursement of CIRP and Liquidation costs and expenses to the Liquidator by the financial creditors of the Corporate Debtor - HELD THAT:- The financial creditor was directed to make payment and reimbursement of CIRP and the liquidation costs and expenses to the liquidator within 10. In compliance thereof the financial creditor, Tata Capital Financial Services Ltd. made the said payment. Receipt and payment of the Corporate Debtor reflecting payment of said cost and expenses is annexed as Annexure-7 to the final report filed. Prima facie as there is no tangible assets of realization or saleable value of the Corporate Debtor and it is not doing any business, therefore the Applicant herein submits that there are absolutely no means or sources available with the Corporate Debtor to discharge its liabilities. In view thereof it is inferred that this application for dissolution is the last resort option available with the Applicant herein to wind up the proceeding of the Corporate Debtor. Through this Order it is hereby declared that not only it is just and equitable but because of the fact that no asset is available for the purpose of 'Liquidation' as reported by the Applicant, this is a fit case of a Corporate Debtor to be dissolved with the directions imposed - the Corporate Debtor, is hereby dissolved. Application allowed. Issues:1. Application for dissolution of a Corporate Debtor under IBBI (Liquidation Process) Regulations, 2016.2. Orders for payment and reimbursement of CIRP and Liquidation costs and expenses to the Liquidator by financial creditors.3. Submission of the final report prior to dissolution of Corporate Debtor.Issue 1: Application for Dissolution of a Corporate DebtorThe Applicant, the Liquidator of the Corporate Debtor, filed an application seeking dissolution of the Corporate Debtor under Regulation 14 of IBBI (Liquidation Process) Regulations, 2016. The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated, leading to liquidation. The Liquidator made necessary announcements and complied with regulations regarding stakeholders and valuations. A preliminary report was filed detailing the financial status of the Corporate Debtor, indicating a lack of assets except for a minimal cash balance. The Liquidator proposed early dissolution due to the absence of tangible assets or business operations, making it impossible to discharge liabilities.Issue 2: Orders for Payment and ReimbursementThe Liquidator sought orders for payment and reimbursement of CIRP and Liquidation costs and expenses from the financial creditors of the Corporate Debtor. The Tribunal directed the financial creditor, Tata Capital Financial Services Ltd., to make the required payments, which were duly made. The Liquidator was allowed to file the final report, which was submitted along with a compliance certificate. The Tribunal ordered the Liquidator to give any remaining cash balance to Tata Capital Financial Services Ltd. against their admitted claim amount and to close the Liquidation Bank Account within a specified timeframe.Issue 3: Submission of Final ReportThe Liquidator submitted the final report under Regulation 45, seeking dissolution of the Corporate Debtor. The Tribunal, in accordance with Section 54 of the Insolvency and Bankruptcy Code, 2016, and Regulation 14 of the Regulations, declared the Corporate Debtor dissolved with immediate effect. Various directions were issued, including the distribution of any remaining cash balance to the financial creditor, closure of the Liquidation Bank Account, and dissemination of the order to relevant authorities. The Liquidator was discharged, and the pending application along with the case stood disposed of. The Tribunal ordered the forwarding of the order to concerned authorities and the Registrar of Companies for further necessary action.In conclusion, the Tribunal granted the application for dissolution of the Corporate Debtor, highlighting the lack of assets for liquidation and the inability to discharge liabilities. The detailed analysis covered the application process, financial orders, and the submission of the final report, ensuring compliance with relevant regulations and legal provisions.