2025 (3) TMI 389 - Tri - IBC

Liquidator's application for re-publishing public announcement under Section 59 rejected for improper asset distribution

In Re: Chandra Prakash Jain Liquidator of Transmissions International India (P.) Ltd.

NCLT Ahmedabad rejected liquidator's application seeking directions to re-publish public announcement under Section 59 read with Section 60(5)(c) and ... Seeking directions to re-publish public announcement and to take status report on record - Section 59 read with Section 60(5)(c) read with 33(5) N) of IBC 2016 read with Rule 11 of the NCLT rules a/w regulation 14(1) of IBBI (Voluntary Liquidation Process) Regulations, 2017 - HELD THAT:- The present application is rejected for reason that the Applicant/liquidator/s under Voluntary Liquidation Process Regulations, 2017 have not exercised his/their roles appropriately in terms of the IBC Act and its regulations thereof and the role of the company (its shareholders) who initiated the voluntary liquidation and the ex-liquidator for having distributed to shareholders without proper assessment of liabilities has to be examined by the ROC and IBBI under their relevant provisions. Let copy of this order be served to the RoC, Income Tax department, ESIC, CGST by the Liquidator for intimation and necessary action, if any, with a copy to IBBI. The registrar is also directed to send a copy of this order to the ROC and IBBI for their information and necessary action, if any. The Tribunal considered an application filed by the liquidator of a company under various sections of the Insolvency and Bankruptcy Code, seeking directions to re-publish a public announcement and to take a status report on record. The company, M/s Transmission International India Private Limited, was undergoing voluntary liquidation, with the applicant replacing the earlier liquidator. The applicant highlighted pending litigations, regulatory matters, and discrepancies in financial records, seeking to re-publish the public announcement for wider reach and address missed claims. The Tribunal analyzed the legal framework, including provisions of the IBC, IBBI regulations, and NCLT rules, to assess the applicant's requests.The Tribunal observed that the company had approved voluntary liquidation in accordance with the IBC provisions. However, it raised concerns about the earlier liquidator's actions, particularly regarding the distribution of equity to shareholders and compliance with the IBC's prescribed mechanisms. The Tribunal noted discrepancies in the status report submitted by the applicant and questioned the appropriateness of the application under the relevant regulations. It emphasized the need for proper assessment of liabilities and adherence to procedural requirements in voluntary liquidation processes.Ultimately, the Tribunal rejected the application, citing the failure of the liquidators to fulfill their roles appropriately under the IBC and its regulations. It directed the liquidator to inform relevant authorities and take necessary actions regarding the examination of the ex-liquidator's actions and the company's shareholders' role in the voluntary liquidation process. The Tribunal emphasized the importance of compliance with regulatory provisions and proper assessment of liabilities before concluding the liquidation process.In summary, the Tribunal's decision focused on the lack of proper conduct by the liquidators involved in the voluntary liquidation process, highlighting the need for adherence to legal requirements and thorough assessment of financial matters to ensure transparency and equity in the liquidation process.