NCLT Indore permits dissolution after full liquidation and distribution under Section 53
Background of the insolvency proceedings
The matter in Navin Khandelwal Vs HDFC Bank Ltd & Ors came before the NCLT Indore Bench as an application filed by the Liquidator under Section 54 of the Insolvency and Bankruptcy Code, 2016. The Liquidator sought a dissolution order in respect of Oxygen Lifeline Retail Private Limited, upon completion of the liquidation process.
The Corporate Debtor, incorporated on 01.09.2017 and registered with the Registrar of Companies, Gwalior, was admitted into Corporate Insolvency Resolution Process (CIRP) by order dated 07.10.2021 in C.P.(IB)/12(MP)/2021. When resolution failed, the Adjudicating Authority ordered liquidation under Section 33 of the Code on 22.09.2022 (order received on 30.09.2022) and appointed Mr. Navin Khandelwal (IBBI Registration No. IBBI/IPA-001/IP-P00703/2017-2018/11301) as Liquidator.
The present application, IA No. 321 of 2023, was moved under Section 54 read with Regulation 45 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, requesting:
- Dissolution of the Corporate Debtor under
Section 54(2)of the Code, and - Any other consequential directions considered appropriate by the Tribunal.
Claims, stakeholders and constitution of SCC
Public announcement and receipt of claims
Following the liquidation order, the Liquidator carried out the process in line with the Code and the Liquidation Process Regulations. In compliance with Regulation 12(1), a public announcement in Form B dated 03.10.2022 was issued inviting claims from stakeholders. Intimation regarding commencement of liquidation was also sent to the Information Utility on 03.10.2022.
The Liquidator collated and verified all claims received. Thereafter, in accordance with Regulation 31A, a Stakeholders Consultation Committee (SCC) was formed on 26.11.2022. The list of stakeholders was filed before the NCLT on 12.12.2022.
The admitted claims and voting shares were as follows:
HDFC Bank (Financial Creditor – secured)
- Amount claimed: Rs. 7,45,28,124
- Amount admitted: Rs. 7,45,28,124
- Voting share: 66.97%
Operational Creditor (Government dues)
- Amount claimed: Rs. 1,89,44,312
- Amount admitted: Nil
Operational Creditors (other than workmen and Government dues)
- Amount claimed: Rs. 6,80,34,368
- Amount admitted: Rs. 3,67,63,463
- Voting share: 33.03%
No claims were admitted from workmen or employees.
Identification, valuation and sale of assets
Assets and valuation
The Corporate Debtor held only two movable assets – both motor vehicles. In terms of Regulation 35(2), the Liquidator appointed registered valuers on 02.03.2023. The details of the assets, as recorded, were:
Audi A6 (Reg. No. MP09JJ2999)
- Mode of sale: E-auction
- Liquidation value: Rs. 21,71,000
- Realisation: Rs. 21,28,254
- Date of transfer: 01.07.2023
Tata Hexa XT (Reg. No. MP09CY2000)
- Mode of sale: E-auction
- Liquidation value: Rs. 7,49,000
- Realisation: Rs. 7,49,000
- Date of transfer: 28.07.2023
Total liquidation value: Rs. 29,20,000
Total realisation from sale: Rs. 28,77,254
E-auction process
To dispose of these assets, the Liquidator issued e-auction sale notices on 31.03.2023 (Round 1) and 13.05.2023 (Round 2). Pursuant to these notices, the Audi A6 and Tata Hexa XT were successfully auctioned on 08.06.2023. The sale proceeds were lodged into the designated liquidation bank account.
The Liquidator confirmed that no other movable or immovable properties of the Corporate Debtor existed for realisation.
Conduct of SCC and decision to proceed for dissolution
During the course of liquidation, seven SCC meetings were held. In these meetings, the SCC members were regularly updated on:
- Status of asset realisation,
- Progress of liquidation-related compliances, and
- Proposed course of action post-realisation.
At the 7th SCC meeting held on 08.08.2023, the stakeholders, with a voting share of 66.97%, passed a resolution that:
- The liquidation process of the Corporate Debtor be concluded; and
- The Liquidator be authorised to file an application before the NCLT for dissolution of Oxygen Lifeline Retail Private Limited.
Acting on this authorisation, the Liquidator filed IA No. 321 of 2023 for dissolution.
Timelines, progress reports and statutory compliances
Completion within one year
The liquidation commenced on 22.09.2022. Under Regulation 44, the process is expected to conclude within one year.