Allowed

In the matter of Proline Infra-Trading Pvt. Ltd. [Ia No. 1837-2022 in Cp (Ib) No. 2490-(MB)-2018]

NCLT15 Dec 2023IA No. 1837-2022 in CP (IB) No. 2490-(MB)-2018

Case brief

AI extract

What is this about?

The Tribunal allowed an application by the Liquidator under Section 54 of the Insolvency and Bankruptcy Code to dissolve Proline Infra Trading Private Limited after its assets were fully liquidated and stakeholders approved dissolution.

What did the court decide?

Proline Infra Trading Private Limited is dissolved with immediate effect; Registry to forward order to ROC; Liquidator discharged; Case closed.

In the matter of Proline Infra-Trading Pvt. Ltd. [Ia No… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022 In

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CP (IB) No. 2490/(MB)/2018

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Under Sections 54 of the Insolvency & Bankruptcy Code, 2016

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Mr. Manoj Kumar Jain

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Having its address at 11, Friends Union Premises CHS, 2^nd Floor, 227 P’D Mello Road,

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Next to Hotel Manama, Fort, Mumbai- 400001.

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…Applicant/Liquidator

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In the matter of

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Lexcorp Advisory Services Private Limited,

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Having its registered office at 301, Office No. 15, Mashraqui Building, 3^rd Floor, 227, P.D. Mello Road, Near G.P.O Fort Mumbai- 400001.

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…Operational Creditor

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V/s

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Proline Infra Trading Private Limited,

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Having its registered office at 301, Gulab Building, 237, P.D Mello Road, Fort, Mumbai- 400001.

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…Corporate Debtor

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Order delivered on: 15.12.2023

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Page 1 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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Coram:

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Anil Raj Chellan Kuldip Kumar Kareer Member Technical Member Judicial

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Appearance:

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For the Appellant :- Adv. Aniruth Purusothaman

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ORDER

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Per:- Coram

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This is an Application by the Liquidator of Proline Infra Trading Private Limited (hereinafter referred to as the “Corporate Debtor”) under Section 54 of the Insolvency & Bankruptcy Code, 2016 (the Code) seeking dissolution of the Corporate Debtor.

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An application for initiation of Corporate Insolvency Resolution Process (hereinafter referred to as the "CIRP") in the matter of Proline Infra-Trading Limited filed by M/s Lexcorp Advisory Services Private Limited, under Section 9 of the Insolvency and Bankruptcy Code ("Code") read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 was admitted by the Hon'ble National Company Law Tribunal, Mumbai Bench in CP No. 2490/IBC/NCLT/MB/MAH/2018

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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vide its order dated October15, 2018 and appointed Ms. Dipti Mehta as the Interim Resolution Professional (IRP).

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The IRP published Form G dated 28.12.2018 in Free Press Journal (in English) and in Navshakti (in Marathi), inviting the Expression of Interest (EoI) from the prospective resolution applicants.

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The members of the CoC directed the IRP to file an Application for change in Resolution Professional (RP). The IRP filed an Application along with the consent of Mr. Ajay Kumar to be appointed as RP. Vide Order dated 23.01.2019, the Tribunal approved the appointment of Mr. Ajay Kumar Regn. No. IBBI/IPA-002/IP-N00139/2017-18/10377 as RP.

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At the 5th meeting of the CoC held on March23, 2019, the RP informed CoC that no Expression of Interest was received till date. No further responses were received, nor any prospective resolution applicant had expressed any interest pursuant to the publication of FORM G (EOI), last date of submission being January 13, 2019. The RP also informed the members of the CoC that 180 days of the CIRP was going to end on 12.04.2019.

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Considering the fact that no response was received to the EoI, the Corporate Debtor did not carry any business activity for long, no regular or adequate cash flow was available to meet expenses and

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Page 3 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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other liabilities, the CoC at its meeting held on 12.04.2019 decided not to seek further extension of CIRP and consented to initiate liquidation proceeding against the Corporate Debtor under section 33 of IBC.

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An Application for seeking liquidation of the Corporate Debtor was filed and Mr. Ankur Kumar was proposed to be appointed as the liquidator. Accordingly, vide Order dated 23.07.2019 Liquidation application was approved by the Tribunal and Mr. Ankur Kumar was appointed as the liquidator.

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A public announcement dated 13.08.2019 in Form B inviting claims from the stakeholders of the Corporate Debtor was published in Financial Express (in English) and in Global Times (in Marathi). The liquidator received total 6 claims in all from the creditors of the Corporate Debtor and the last date of submission of claims was 10.09.2019.

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The liquidator on 18.02.2020, submitted the list of claims received from stakeholders and also published in Financial Express (in English) and in Navrashtra (in Marathi) about filing the said list of the stakeholders before NCLT. The list of stakeholders who submitted their claims is as under :-

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Page 4 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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Claims of the Financial Creditors: -

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Sr.	Name of	Nature	Amount	Revise	Claim admitted by
No.	the Financial Creditor	of claim	claimed	d claim	the liquidator
1.	Network Telelink Private Limited	Unsecu red	219,50,00,000/-	-	219,50,00,000/-
2.	European Projects & Aviation Limited	Unsecu red	4,70,832/-	-	4,70,832/-
3.	Lexcorp Advisory Services Pvt. Ltd.	Unsecu red	23,60,000	-	23,60,000/-
4.	Auspice Trading Pvt. Ltd.	Unsecu red	30,40,803/-	-	30,40,803/-

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Page 5 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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Claims of Operational Creditors and other stakeholder :-

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Sr. No.	Name of the Operational Creditor	Amount Claimed in Rs.	Claim admitted by the liquidator	Category
1.	Principal Commissioner of Income Tax-1	29,81,27,130/-	29,81,27,130/-	Operational Creditor
2.	Mr. Ajay Kumar	7,49,872/-	7,49,872/-	Other Stakeholder

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The liquidator opened a Bank account bearing account no. 219605000251 in the name of ‘Proline Infra Trading Private Limited – in Liquidation’ on 06.03.2020 with ICICI Bank Limited.

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The liquidator closed the existing bank accounts of the Corporate Debtor maintained at HDFC Bank and Syndicate Bank and transferred the balance of Rs. 12,798.25/- to the liquidation bank account with ICICI Bank.

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The Liquidator conducted the 1^st meeting of the Stakeholders' Consultation Committee (hereinafter referred to as the "SCC) of the Corporate Debtor on 06.09.2021 and informed the SCC members that due to conflict of interest, he would not continue as the liquidator and therefore intimated the SCC to propose appointment of the new liquidator. Accordingly, the Operational Creditor herein proposed the name of Mr. Manoj Kumar Jain to be appointed as the

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Page 6 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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In CP (IB) No. 2490/(MB)/2018

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IA No. 1837/2022

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liquidator. The proposed liquidator had furnished his consent to act as the liquidator and indicated professional fees of Rs. 10,00,000/plus taxes and out of pocket expenses if any. However, after due negotiations, fees of Rs. 8,00,000/- plus taxes and out of expenses were agreed and approved by the SCC in the 1^st meeting held on 06.09.2021.

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Further, vide order dated 26.10.12021, Mr. Manoj Kumar Jain (Regn. No. IBBI/PA-001/IP-P00535/2017-2018/10960) was appointed as the Liquidator for the Corporate Debtor and also approved the fees thereon.

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The Applicant appointed the IBBI registered valuers, namely Mr. Rahul Jindal (Regn No. IBBI/RV2019/1204 on 26.11.2021 and, Ms. Megha Bidwatka (Regn No IBBI/RV/03/2020/12958) on 29.11.2021 to conduct valuation of Securities/Financial assets of the Corporate Debtor.

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The only Asset available with the Corporate Debtor were the Preference Shares of an unlisted entity namely Global Holding Corporation Private Limited by way of following number of preference shares :

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30,60,000 number of 0.1%; 13 years Optionally Convertible Preference Shares of face value of Rs. 10 each.

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Page 7 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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The Applicant appointed Mr. Rohan Kothari (Membership No. 141579) as Transaction Auditor to conduct the transaction audit of the Corporate Debtor on November 30, 2021. He submitted his transaction audit report dated 30.03.2022, wherein it was concluded that there were no transactions under Sections 43,45,50 and 66 of the Insolvency and Bankruptcy Code, 2016.

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The Applicant filed an Application seeking exclusion of 715 days from 15.03.2020 to 28.02.2022 from liquidation period on account of Covid-19 pandemic. Accordingly, 715 days were excluded and the liquidation period came to an end on 07.07.2022.

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Further, the valuation reports were received from the valuers and the realizable value of the assets in the form of preference shares were valued at zero due to significant negative/NIL net-worth of the unlisted Company.

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In the 3^rd SCC meeting held on 31.03.2022, the Applicant informed the SCC members about the sale of assets under Regulation 32 of the IBBI (Liquidation Process) Regulations, 2016. The e-auction process for the sale of assets was consented by the stakeholders and accordingly the Applicant made a public announcement on 09.04.2022 in the Free Press Journal and in Navshakti with respect to e-auction of the only asset of the Corporate Debtor.

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Page 8 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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The Reserve price in the e-auction conducted on 17.01.2022 for the asset was Rs. 10,71,000/- including earnest money deposit of Rs. 1,10,000/- to be submitted by the qualified Bidder. Further, the eligibility documents were submitted by Mr. Jeevan Mhatre (hereinafter referred to as the purchaser) and paid the earnest money deposit to participate in the e-auction. Pursuant to the e-auction, Mr. Jeevan Mhatre was declared as the successful bidder with a bid amount of Rs. 10,71,000/- and in accordance to that a Letter of intent (LoI) dated 27.04.2022 was issued to the purchaser. The details of the assets as per the Asset Memorandum and Final Sale Report is as under :-

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Sr.	Assets	Mode of	Estimated	Realization	Date of
No.		Sale	Liquidation value	Amount	Transfer to Liquidation Account
1.	Investments in unlisted Securities :-	Sale through e-auction	NIL	EMD:-Rs. 1,10,000/-	10.04.2022
	0.1% 13 years optionally	process as approved		Part payment of Rs. 1,72,350/-	28.04.2022
	convertible Redeemable Preference	by the members of SCC		Full and Final Payment Rs. 7,88,650/-	02.05.2022

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Page 9 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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CP (IB) No. 2490/(MB)/2018

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Shares of Rs. 10/- each of		Total :- 10,71,000
Global
Holding
Corporation
Private
Limited. Balance		52,196/-
with Bank
	Total	11,23,196/-

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The amount distributed to the stakeholders as per section 53 of the

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Code is as under :-

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Sr. No.	Stakeholders	Amount Claimed	Amount Admitted	Amount Distributed
1.	CIRP costs	82,600	82,600	75,600
	Liquidation Costs	-	-	-
	Erstwhile Liquidator charges + OPE	1,94,110	1,94,110	1,77,660

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Page 10 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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CP (IB) No. 2490/(MB)/2018

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	Liquidators Fees + OPE	1,71,520.02	1,71,520.02	1,54,520.02
	Legal Counsel Fees	1,75,000	1,75,000	1,57,500
	Filing Fees	2,000	2,000	2,000
	Transaction Auditor fees	1,77,000	1,77,777	1,62,000
	Valuation Charges	35,400	35,400	35,400
	E-Auction Charges	4,484	4,484	4,484
	Audit Fee Statutory Audit	61,360	61,360	56,160
	Audit Fee Liquidation Accounts	28,500	28,500	28,500
	Advertisement Expenses	56,530	56,530	56,530
	Tax Consultant	5,000	5,000	5,000
	Storage Charges (For 8 years)	80,000	80,000	72,000
	Printing & Stationery	3,665	3,665	3,665
	Xerox Charges	5,210	5,210	5,210
	Bank Charges	41,233.48	41,233.48	41,233.48
	TDS paid			86,150
2.	Total Liquidation Costs	11,23,612.50	11,23,612.50	11,23,612.50
4.	Distribution to stakeholders

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Page 11 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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a.	Auspice Trading Private Limited	30,40,803	30,40,803	NIL
b.	European Projects and Aviation Limited	4,70,832	4,70,832	NIL
c.	Lexcorp Advisory Services Private Limited	23,60,000	23,60,000	NIL
d.	Network Tele Link Private Limited	219,50,00,000	219,50,00,000	NIL
e.	Principal Commissioner of Income Tax	29,81,27,130	29,81,27,130	NIL
	Total	249,89,98,765	249,89,98,765	NIL
	Total of all above	2500204977.50	2500204977.50	11,23,612.5

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In the 4^th SCC meeting held on 12.05.2022 the members of the stakeholders approved Dissolution and directed the Applicant to file Application for dissolution under section 54 of the Insolvency and Bankruptcy Code, 2016 and file Final Report together with Form H.

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Page 12 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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Further, the liquidation account opened was closed upon the distribution of funds as per the provisions of section 53 of the Code. Copy of Closure Certificate of Bank account No. 219605000251 is annexed to the application.

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The Applicant successfully uploaded FORM GNL-2 together with a copy of the FINAL REPORT with FORM-H on the portal of ROC, Mumbai, upon payment of necessary filing fees of Rs 500/to the ROC, Mumbai, (Receipt No SRN NO: F13708490 dated July 4, 2022. The said FINAL REPORT was also emailed to Insolvency and Bankruptcy Board of India along with Form H on 04.07.2022.

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On examining the submissions made by the Counsel appearing for the Applicant and the documents annexed to the Application, it appears that the affairs of the Corporate Debtor have been wound up and its assets have been completely liquidated. The above facts and circumstances indicate that due process of liquidation, as per extant provisions and in the manner indicated in the Code and Regulations, have been followed by the Liquidator to liquidate the assets of the Corporate Debtor. The liquidation process has been duly completed as per the provisions of the Code. Thus, it would be just and equitable for this Authority to dissolve the Corporate Debtor. No party is going to be adversely affected thereby. In view of the above the Corporate Debtor deserves to be dissolved. Hence ordered.

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Page 13 of 14

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IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT II

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IA No. 1837/2022

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In CP (IB) No. 2490/(MB)/2018

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In view of the above the Corporate Debtor deserves to be dissolved. It is ordered accordingly in the following terms :

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ORDER

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The Application be and the same is allowed as follows.

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i. Proline Infra Trading Private Limited , the Corporate Debtor, is hereby dissolved with immediate effect .

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ii. The Registry is directed to forward a certified copy of this order to the Registrar of Companies, Mumbai within a period of seven days for necessary action.

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iii. The Liquidator is discharged.

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iv. CP (IB) No. 2490/(MB)/2018 stands closed .

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Sd/-

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Sd/-

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ANIL RAJ CHELLAN KULDIP KUMAR KAREER MEMBER TECHNICAL MEMBER JUDICIAL

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Page 14 of 14

In the matter of Proline Infra-Trading Pvt. Ltd. [Ia No. 1837-2022 in Cp (Ib) No. 2490-(MB)-2018]

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In the matter of Proline Infra-Trading Pvt. Ltd. [Ia No. 1837-2022 in Cp (Ib) No. 2490-(MB)-2018]

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