Company Dissolution Granted under Insolvency Code: Compliance, Claims Settlement, and Record Retention

The Tribunal granted the application for dissolution of the company under section 59(7) of the Insolvency and Bankruptcy Code, 2016. The Liquidator complied with regulatory requirements, settled claims, and obtained necessary certificates. The company was dissolved, and the Liquidator was instructed to retain records for eight years. An order copy was to be filed with the RoC within the statutory period, and the file was archived.

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Issues Involved:
1. Application for dissolution of the company under section 59(7) of the Insolvency and Bankruptcy Code, 2016.
2. Compliance with the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017.
3. Observations and compliance issues raised by the Registrar of Companies (RoC).
4. Settlement of claims and financial obligations during the liquidation process.
5. Delay in the liquidation process and compliance with regulatory requirements.

Issue-wise Detailed Analysis:

1. Application for Dissolution:
The application was filed by the Voluntary Liquidator under section 59(7) of the Insolvency and Bankruptcy Code, 2016, read with the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, seeking the dissolution of the company.

2. Compliance with IBBI Regulations:
The company, incorporated on 25.03.2010, ceased business activities in January 2018 due to limited financial resources. A resolution for voluntary liquidation was passed on 08.03.2019, and Mr. Neeraj Parmar was appointed as the Liquidator. The necessary declarations and notifications were submitted to the Registrar of Companies and IBBI. Public announcements were made, and the Liquidator opened a bank account for liquidation purposes. Claims were verified and settled, and the liquidation process was documented and reported in compliance with the regulations.

3. Observations by RoC:
The RoC observed that the company failed to file its Balance Sheet and Annual Return for the financial year 2018-19, violating sections 137(1) & 92(4) of the Companies Act, 2013. The liquidation process exceeded the prescribed one-year period, and the RoC noted the absence of supporting documents for shareholders' meetings. The applicant responded by stating that the company ceased business activities before the end of the financial year 2018-19, and thus, was not required to convene an AGM or file annual returns. The company complied with all necessary filings and audit requirements until it ceased operations.

4. Settlement of Claims:
The Liquidator received a claim from an operational creditor, B. Samrish & Co., for Rs. 8,85,000, which was settled. The Liquidator also obtained a No Objection Certificate from the Income Tax Department and addressed issues related to income tax refunds and GST registration.

5. Delay in Liquidation Process:
The liquidation process was delayed due to the late receipt of income tax refunds and coordination issues with the bank regarding the repatriation of funds to the non-resident shareholder. Meetings of contributories were held as required, and annual status reports were prepared. The Liquidator complied with the regulatory requirements, including submitting the final report to IBBI and RoC.

Conclusion:
The Tribunal observed that all necessary steps were taken by the Liquidator, including the settlement of claims, compliance with regulatory requirements, and obtaining the necessary certificates. There were no legal impediments in allowing the prayer for dissolution. The company was dissolved with effect from the date of the order, and the Liquidator was directed to preserve records for at least eight years. A copy of the order was to be filed with the RoC within the statutory period. The file was consigned to the Record Room.

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