2022 (7) TMI 1250 - Tri - Insolvency and Bankruptcy

Dissolution of Corporate Entity under Insolvency Code: Compliance, Liquidation, and Closure

The court ordered the dissolution of a Corporate Person under Section 59(7) of the Insolvency and Bankruptcy Code, 2016. The Corporate Person, facing ... Dissolution of the Corporate Person - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On perusal of the documents annexed to the Petition, it appears that the affairs of the Corporate Person have been completely wound up and its assets have been completely liquidated. It is also satisfied from the documents on record that the voluntary liquidation is not with intent to defraud any person and that the bank account for the purpose of Liquidation has been closed. In view of the facts and circumstances and the submissions made by the Applicant, the Corporate Person deserves to be dissolved - application allowed. Issues Involved:1. Company petition filed under Section 59(7) of the Insolvency and Bankruptcy Code, 2016 for dissolution of a Corporate Person.2. Procedural compliances related to voluntary liquidation process.3. Distribution of assets during the liquidation process.4. Ceasing of operations and seeking an order of dissolution for the Corporate Person.Analysis:Issue 1: Company petition for dissolutionThe judgment pertains to a Company Petition filed under Section 59(7) of the Insolvency and Bankruptcy Code, 2016 by a Corporate Person seeking dissolution. The Corporate Person, engaged in manufacturing and other activities, decided to proceed for Voluntary Liquidation due to unsatisfactory business growth and lack of revenue generation since April 2019. The petition was filed by the Liquidator appointed by the Board of Directors.Issue 2: Procedural CompliancesThe judgment details the procedural compliances followed during the voluntary liquidation process. This includes holding an Extra-Ordinary General Meeting where the Special Resolution for liquidation was approved, submitting a Declaration of Solvency by the Directors, providing financial statements, conducting meetings with Contributories, making public announcements inviting claims, and intimating relevant authorities about the liquidation process. All necessary documents and reports were duly submitted and complied with as per the regulations.Issue 3: Distribution of AssetsRegarding the distribution of assets, it was stated that the Corporate Person had no significant assets or liabilities except for a bank balance. The Bank was informed about the liquidation process, and a specific account was opened for the liquidation proceedings. After making legal and non-statutory payments, the assets were fully liquidated, and all dues of the Corporate Person were settled, leaving no outstanding amounts to be paid to shareholders.Issue 4: Ceasing of Operations and DissolutionThe judgment highlighted that the operations of the Corporate Person had ceased since the financial year 2019-20. The Liquidator confirmed that all liabilities were extinguished, and there were no remaining assets to be realized. It was further declared that no legal proceedings were pending regarding the matter. After examining the submissions and documents, the Tribunal ordered the dissolution of the Corporate Person, directing the Liquidator to serve a copy of the order to the Registrar of Companies for necessary action.In conclusion, the judgment detailed the entire process of voluntary liquidation, including procedural steps, asset distribution, and the ultimate dissolution of the Corporate Person in compliance with the Insolvency and Bankruptcy Code.