2022 (2) TMI 904 - Tri - Insolvency and Bankruptcy

Company Voluntary Liquidation under Insolvency & Bankruptcy Code: Process, Compliance, and Dissolution

In Re : Grewal Estates Private Limited

The company successfully underwent voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016. The Board of Directors declared ... Voluntary liquidation of Corporate Debtor - Section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- In the present case, it may be seen from the records the main intention for the company to wind up its services is that company decided to close down its business operations and doesn't intend to carry on its business operations and pursue objects for which it was incorporated. Further, the applicant has informed the concerned authorities i.e. IBBI, RoC and Income Tax Department and has also made paper publication in Form-A in two newspapers. The Liquidator has completed the final distribution of assets and has also closed the bank account. The Liquidator has also prepared and submitted the final report to the IBBI and RoC. The Application is duly supported by the affidavit of the Liquidator. It is submitted through the IBBI in its reply that the report under Regulation 38(2) of the IBBI (Voluntary Liquidation Process) Regulations, 2017 has been received and further the Board has no other role in the voluntary liquidation proceedings. The concerned RoC has also submitted in its report that as per data available and maintained, no inquiry/inspection/complaint/legal action has been proceeded/pending against the subject company - It is further submitted in Income Tax Department Report vide Diary No. 00366/3 that after consulting the record it has found that as of now, no demand is outstanding against the Petitioner Company nor any assessment/penalty/prosecution proceedings are pending as of now. The applicant Company is hereby dissolved in terms of Section 59(8) of the Insolvency & Bankruptcy Code, 2016 with effect from the date of the present order - Application allowed. Issues:1. Voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016.2. Declaration of solvency and appointment of liquidator.3. Compliance with statutory requirements for voluntary liquidation process.4. Preparation and submission of reports by the liquidator.5. Dissolution of the company and communication of the order to relevant authorities.Analysis:Issue 1: Voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016The Company Petition was filed for voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016, along with the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017. The decision to close down business operations was made as the company had not been carrying on any business for several years.Issue 2: Declaration of solvency and appointment of liquidatorThe Board of Directors made a Declaration of Solvency, approved voluntary liquidation, appointed a liquidator, and approved the notice of Extra Ordinary General Meeting (EOGM) for voluntary liquidation. The company ensured that it had no debts or would be able to pay them in full from the proceeds of asset sales. The shareholders passed a special resolution to liquidate the company and appointed an Insolvency Professional as the liquidator.Issue 3: Compliance with statutory requirements for voluntary liquidation processThe company complied with various statutory requirements, including notifying/filing the special resolution with the Registrar of Companies (ROC) Chandigarh, informing the Income Tax Department and ROC about the liquidation and appointment of the liquidator, and making public announcements inviting claims from stakeholders. The liquidator prepared lists of stakeholders, submitted reports, and settled claims during the liquidation process.Issue 4: Preparation and submission of reports by the liquidatorThe liquidator submitted preliminary reports, prepared lists of stakeholders, distributed assets, closed bank accounts, and prepared a Final Report containing details of receipts and payments during the liquidation process. The liquidator ensured the final distribution of assets, closed the bank account, and submitted the final report to the IBBI and ROC.Issue 5: Dissolution of the company and communication of the order to relevant authoritiesAfter reviewing the records and submissions, the company was dissolved in accordance with Section 59(8) of the Insolvency & Bankruptcy Code, 2016. The liquidator was directed to communicate the order to the Registrar of Companies (Chandigarh), IBBI, and other statutory authorities within the specified timeframe. The application for voluntary liquidation was allowed and disposed of accordingly.