The Kolkata Bench of the National Company Law Appellate Tribunal (NCLT) recommended investigation against the liquidator on failure to comply with Regulation 45 of the Liquidation Regulations.
The instant petition wass filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 by the Liquidator, Ms. Sonu Jain of the Corporate Debtor, Venkateshwara Capital Management Ltd seeking for dissolution of the Corporate Debtor as there is no scope from realization from assets.
The Financial Creditor, Religare Finvest Limited had filed an application under Section 7 of the I&B Code against the Corporate Debtor, Venkateshwara Capital Management Ltd and vide an order dated March 5, 2019, the Tribunal admitted this Company Petition and initiated Corporate Insolvency Resolution process against the Corporate Debtor and Mr. Shashi Agarwal was appointed as Resolution Professional.
Thereafter, Ms. Sonu Jain, the Petitioner herein, was appointed as Liquidator to conduct the liquidation process as till that date, no Resolution Plan was received and a fresh moratorium under Section 33(5) of I&B Code was commenced.
The Liquidator submitted that the Corporate Debtor had investment in Godavari Commercial ServicesPvt. Ltd. and Coastal Fertilisers Ltd., which were required to be liquidated prior to dissolution of theCorporate Debtor. However, the shares of Godavari Commercial Services Pvt. Ltd. and CoastalFertilisers Limited had already been sold to Moonview Infra realtors Pvt. Ltd. to set off liability againstthe same as on 01.04.2018 i.e., before the commencement of CIRP.
A Two-Member Bench of the Tribunal comprising Balraj Joshi Member (Technical) and Bidisha Banerjee Member (Judicial) obserevd that “The whole thrust of the liquidator after spending a considerable period in carrying out the liquidation is to only state that the assets are not realisable and also by the quirk of fate the securities held by the corporate debtor have been sold surreptitiously. On this ground the winding up of the corporate debtor is being prayed for even as it is not clearly mentioned as to what was the subject matter of the liquidation and what was sold and what was left.
The Tribunal noted that there was no proper record of CoC and/or the SCC meetings from where the chain of events could be traced to draw some conclusions about the process integrity. In absence of the mandatory form ‘H”, the final progress report as required under Regulation 45(3) of the Liquidation process regulations, this Adjudicating Authority rejects this application as it does not comply with the requirements of Section 54 of IBC 2016 read with relevant IBBI regulations.
“This Adjudicating Authority also recommends an investigation be carried out by the IBBI on the conduct of the liquidator in the present case” the Tribunal concluded.
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