Allowed

In the matter of I.E. Trading Company Private Limited C.A. 126 -(ND)-2018, C.A 516-ND-2019 in Company Petition No. (IB)-493 (ND)-2018

NCLT21 Nov 2019

Case brief

AI extract

What is this about?

The NCLT granted an application for corporate insolvency resolution process (CIRP) collapse and liquidation under the IBC. The Tribunal observed that the debtor had no assets or operations and the CoC unanimously resolved for liquidation. The Hon'ble Court appointed the Resolution Professional as liquidator and struck off the moratorium.

What did the court decide?

Liquidation of the Corporate Debtor ordered; Resolution Professional appointed as Liquidator; Moratorium ceased and fresh moratorium commenced under Section 33(5).

In the matter of I.E. Trading Company Private Limited… — Insolvency and Bankruptcy | NCLT (2019)

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IN THE NATIONAL COMPANY LAW TRIBUNAL BENCH IV, NEW DELHI C.A. 126 /(ND)/2018, C.A. 516/ND/2019 IN Company Petition No. (I13)- 493 (ND)/2018

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IN THE MATTER OF: SANJAY AGRAWAL (RP)

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.... APPLICANT

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AND

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IN THE MATTER OF:

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M/s STORE SUPPLY (INDIA) AGENCY

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.... PETITIONER

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Versus

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Ws LE TRADING COMPANY PRIVATE LIMITED

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.... CORPORATE DEBTOR

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Under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 for liquidation of the corporate debtor

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Corarn: DR. DEEPTI MUKESH HON'BLE MEMBER (JUDICIAL) SH. HEMANT K. SARANGI HON'BLE MEMBER (TECHNICAL)

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Presents:

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For the petitioner Fbr RP For the Respondent

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MEMO OF PARTIES

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C.A. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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M/s STORES SUPPLY (INDIA) AGENCY

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Having registered office at:

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705, Akash Deep Building,

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'26-A, Barakhamba Road, New Delhi-110001

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... Applicant / Financial Creditor

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VERSUS

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M/s I.E. TRADING COMPANY PRIVATE LIMITED

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Having its registered office at: A-119, Okhla Industrial Area, Phase-II, New Delhi-110049

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...Respondent/ Corporate Debtor

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Judgment delivered on: 21.11.2019

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JUDGMENT

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PER- SH. HEMANT KUMAR SARANGI, MEMBER (TECHNICAL)

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This is an application filed by the Resolution Professional under

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Section 33 (2) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the "Code") for passing an order for liquidation of the corporate debtor, M/s I.E. Trading Company

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Private Limited.

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2. Facts in brief are that the Operational Creditor,, Stores

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Supply (India) Agency had filed an application b'eOrin e*

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C.A. 126 (ND)/2018 IN C.P (IE3)- 493(ND)/2018

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493(ND)/2018 under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s LE. Trading Company Private Limited. The said application was admitted by this tribunal vide order dated 13.07.2018 and Mr. Sanjay Agarwal was appointed as Interim Resolution Professional (1RP).

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In terms of Regulation 6 (1) of the Insolvency and Bankruptcy

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Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the said Interim Resolution Professional made a public announcement in FORM-A on 24.07.2018. The Public announcement was also uploaded on the website of Insolvency and Bankruptcy Board of India (IBBI).

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The Interim Resolution Professional constituted a Committee of

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Creditors, which comprised of sole financial creditor, the applicant herein. In its first meeting held on 16.08.2018, Committee of Creditors appointed the IRP to act as Resolution Professional (RP).

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The relevant portion of minutes of 3rd meeting of CoC dated

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20.10.2018 has been reproduced below for ready reference:

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"ITEM NO. 4

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C.A. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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To discuss and decide further Course of action(s) to be taken by RP as per the IBC-2016 in relation to ongoing CIRP against the Corporate Debtor

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... Chairman / RP informed the COC that he has put forth before all the relevant facts & information available with him and now it is upto CoC to decide further course of action.

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Mr. S K Gupta & Mr. Pawan Chowdhary both the members who constitute CoC were of the opinion that looking to facts that there are no business operations, no tangible assets except one book debt which is disputed, there is no possibility of any resolution applicant who may come forward to take liabilities of corporate debtor. Thus, they were of the opinion that the issuance of 'expression of interest' is just wastage of time and money with no possibility of any positive outcome.

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After due consideration, both the CoC members were of the view that there is no other option except to go for liquidation under the code. The chairman/RP then-:readout the provisions of section 33 (2) of the

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CA. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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informed the CoC that a resolution to liquidate the Corporate debtor needs to be passed with requisite 66% vote share of CoC.

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MATTERS TO BE VOTED UPON

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RP proposed the following item for voting to the COG

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members: -

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1. To discuss and decide further course of action(s) to be taken by RP as per the IBC-2016 in relation to ongoing C1RP against the Corporate debtor.

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The matter was discussed in detail and after discussion the

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following resolution was passed unanimously:

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"Thus both the members of CoC unanimously with 100% vote share resolved that Corporate debtor should be liquidated in accordance with the provisions of the IBC2016 and authorized the 'Resolution Professional' (RP) to

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file the application before the AA u/s 33 (2) of IBC-2016."

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C.A. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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2. To take a note and approve the running cost incurred by RP so far based on time (no. of days) devoted by RP in relation to CIRP.

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The matter was discussed in detail and after discussion the following resolution was passed unanimously:

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"After the discussion, both the members of the CoC representing 100% vote share of CoC accepted the proposal of RP and approved fee to be paid to him on being appointed as liquidator @ Rs. 21000/- ( Rupees Twenty One Thousand) per actual man day deployed subject to maximum of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousands) per calendar month plus taxes and all expenses to be incurred on or by him while carrying out his duties and obligations as a liquidator as per the provisions of the code."

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The Resolution Professional discloses that no further assets remain for realisation in the company and corporate debtor has no potential assets including intangible assets against which resolution process is to be carried out, hence neither val,uption of the assets can be done nor expression of intere4:d6h,be floated!

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C.A. 126 (ND)/2018 IN C.P (16)- 493(ND)/2018

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invited. There is practical impossibility to continue the resolution process against corporate debtor. The CoC in its third meeting dated 20.10.2018 after elaborate discussions and deliberations, passed the following resolution with 100% vote share:

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a) That the liquidation of the Corporate Debtor, is recommended;

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b) That the RP is requested to file application before the Adjudicating Authority under Section 33 of the Code;

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c) That the Mr. Sanjay Agrawal, the RP be recommended to be appointed as liquidator;

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d) that fees payable to the liquidator for the conduct of the liquidation proceedings shall be Rs. 21,000/(Rupees Twenty One Thousand) per actual man day deployed subject to maximum Rs. 1,50,000/- (Rupees One Lakh Fifity Thousand) per calendar month plus taxes and all the expenses to be incurred on or by him while carrying out his duties and obligations as a liquidator as per the provisions of the code.

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C.A. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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The Resolution Professional (RP) submitted the present

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application no. CA- 126(ND)/2018 highlighting that the financial & legal position of the company as follows:

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a. Corporate Debtor is not having business operations for last more than 5 years and there is no operating revenue. It also does not have any employee.

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b. There is no tangible asset except one trade receivable, recoverable from one related party to the tune of Rs. 131.79 lacs excluding interest and one trade payable to the tune of Rs. 141.06 lacs excluding claim of interest which constitute 98.93% of the total of two claims received by IRP.

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c. Debt (Trade receivable) due from related party namely 'D B Engineering private Limited' pertains to the various bills against which supply of goods were made during the period from 24.04.2013 to 04.06.2013.

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However, last payment made by Company to Corporate Debtor was on 11.09.2015.

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d. Debt (Trade receivable) is disputed by the debtor of Corporate debtor on the grounds primarily that as per the section 11(a) of IBC-2016 a Corporate Debtor undergoing --

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C.A. 1.26 (ND)/2018 IN C.P (18)- 493(ND)/2018

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CIRP cannot initiate C1RP against its debtors and that the

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said debt is time barred under the limitation act.

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e. Trade receivable and payable is duly reflected and matched with each other in audited financial statements of both the Companies for the financial year ended as on 31.03.2015.

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Mrs. Anuja Beni, ex-director of the corporate Debtor has filed her reply to the present CA under consideration, In her reply she raises objections stating that the present application suffers from lack of bona-fides, the present application has been preferred without making any sincere and serious efforts towards the resolution of the Corporate Debtor in as much as various mandatory provisions and regulations under IBC have not been complied with by the RP.

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In its rejoinder the applicant, states that, it is specifically denied that the RP/ Applicant has preferred this application without making any sincere and serious efforts towards the resolution of the Corporate Debtor. It is denied that mandatory provision of the IBC has not been complied by RP/Applicant. The specific compliances have been made and status reports have been filed regularly by the RP/Applicant in relation to the said compliances.

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C.A. 126 (ND)/2018 IN C.P (113)- 493(ND)/2018

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In compliance of the order dated 02.09.2019, passed by this bench, this bench had directed the RP to file the true copies of the affidavit of ex-director Mr. Karan Berlin support of liquidation application, served on him by the counsel of Mr. Karan Ben, Mr. Sachit Dhawan.

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. The voting sheet of the 3' meeting of CoC held on

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20.10.2018 is on record. The consent of liquidator in Form AA is also on record.

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In the aforesaid factual background and in the absence of any

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resolution plan; there is no other alternative but to seek for liquidation of the corporate debtor under Section 33 of the Code.

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During the pendency of present application, the Mrs. Anuja Ben, the Ex-director, of the Corporate Debtor has filed a CA No. 516/ND/2019, for setting aside the order dated 31.10.2019 passed by this bench for reserving order on the application filed by RP to initiate liquidation proceedings. However, the same is hereby, dismissed through this order, as the Applicant in CA No. 516/ND/2019 has not given any cogent reasoning as to why the said order should be set aside and also, A. Resolution

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Professional states that the Corporate Debtor tangible

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C.A. 126 (ND)/2018 IN C.P (113)- 493(ND)/2018

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assets for realization, against which resolution process could be carried out.

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As a sequel to above, the application is allowed, ordering liquidation of the corporate debtor, M/s. I.E. Trading Company Private Limited in the manner laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 along with

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following directions:

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Mr. Sanjay Agrawal resolution professional holding registration no. IBBI/IPA-001/IPP00494/2017-18/10882, is appointed as

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Liquidator in terms of Section 34(1) of the Code;

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Mr. Sanjay Agrawal is directed to issue Public Announcement stating that the corporate debtor is in liquidation in terms of Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016;

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C.A. 126 (ND)/2018 IN C.P (113)- 493(ND)/2018

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The Registry is directed to communicate this Order to the Registrar of Companies, NCT of Delhi & Haryana and to the Insolvency and Bankruptcy Board of India;

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The Order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence;

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This order shall be deemed to be a notice of discharge to the officers, employees and the workmen of the corporate debtor as per Section 33(7) of the Insolvency and Bankruptcy Code, 2016;

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The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter Ill of Part II of the Insolvency and Bankruptcy Code, 2016 and in accordance with the relevant rules and regulations.

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C.A. 126 (N 0)/2018 IN C.P (IB)- 493(ND)/2018

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He shall follow up and continue to investigate the financial affairs of the Corporate Debtor to determine the undervalued and preferential transactions etc.

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The Liquidator shall submit a Preliminary Report to the Adjudicating Authority within seventy-five days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016.

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Copy of this order be sent to the financial creditors, corporate debtor and the Liquidator for taking necessary steps.

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C.A. 126(ND)/2018 filed in 1B 493(ND)/2018 is disposed of

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in the aforesaid terms.

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The office is directed to communicate a copy of the order to the Financial Creditor, the Corporate Debtor and the Interim Resolution Professional at the earliest but not later than seven days from today. A copy of this order be also sent toile RO for

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C.A. 126 (ND)/2018 IN C.P (IB)- 493(ND)/2018

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updating the Master Data. ROC shall send compliance report to

the Registrar, NCLT.

(HEMANT K. SARANGI) MEMBER (TECHNICAL)

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(DR. DLPTI MUKESH) MEMBER (JUDICIAL)

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Deputy Registrar National Company Law TnbunEA co Complex, Neel^Dern4-11OOo3

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FREE OF COST COPYi

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C.A. 126 (ND)/2018 IN C.P (16)- 493(ND)/2018

In the matter of I.E. Trading Company Private Limited C.A. 126 -(ND)-2018, C.A 516-ND-2019 in Company Petition No. (IB)-493 (ND)-2018

Case brief

What is this about?

What did the court decide?

In the matter of I.E. Trading Company Private Limited C.A. 126 -(ND)-2018, C.A 516-ND-2019 in Company Petition No. (IB)-493 (ND)-2018

Case brief

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