The Liquidator for M/s. Kanakadhara Ventures Private Limited - Further on going through the final report, it is evident that the Liquidator has successfully sold the Corporate Debtor as a going concern. Therefore, this is a fit case for the closure of the liquidation process.

 NCLT Hyderabad (2024.09.17) in The Liquidator for M/s. Kanakadhara Ventures Private Limited  [IA NO. 1721 of 2024 In CP(IB) No.745/HDB/2018] held that;

• Further on going through the final report, it is evident that the Liquidator has successfully sold the Corporate Debtor as a going concern. Therefore, this is a fit case for the closure of the liquidation process. 

Excerpts of the Order;

ORDER 

# 1. The present application is filed by the liquidator of the Corporate Debtor M/s. Kanakadhara Ventures Private Limited u/s 35 (1)(n) & Section 60(5)(c) of Insolvency and Bankruptcy Code 2016, read with Regulation 45 (3)(a) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Regulations) seeking for following reliefs: 

• i. For closure of the Liquidation process of the corporate debtor in terms of Regulation 45 (3)(a) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 from the date of order. 

• ii. To take on record the Final Report filed by the Liquidator in terms of Regulation 45 (3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. 

• iii. To take on record the Compliance certificate(Form- H) filed by the liquidator in terms of Regulation 45 (3)(a) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. 

2. It is submitted that the Corporate Insolvency Resolution Process (CIRP) for M/s Kanakadhara Ventures Private Limited (herein after referred as Corporate Debtor) was initiated upon an application filed by M/s IDBI Bank Limited (herein after referred as Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016(IBC). It is further submitted that this Tribunal admitted the application vide its order dated 22.11.2019 in CP(IB) No. 745/7/HDB/2018, and appointed Sri B. Nagabhushanam as the Interim Resolution Professional (IRP), later confirmed as the Resolution Professional (RP) during the first meeting of the Committee of Creditors (CoC) held on 23.12.2019. 

3. It is submitted that subsequently, IA No. 169/2021 was filed by the Resolution Professional, seeking the liquidation of the Corporate Debtor under Section 33 of the IBC 2016. It is further submitted that this Tribunal, vide order dated 17.08.2021 admitted into liquidation and appointed Mr. Chillale Rajesh as the Liquidator. Upon his appointment, the Liquidator made public announcements under Form B of Schedule II, inviting claims from stakeholders, which were subsequently finalized. 

4. Brief overview of the liquidation process:- 

4.1 The Liquidator issued public announcement, inviting claims from the stakeholders on 19.08.2021. On receipt of the same the Liquidator after verifying and collating the same prepared list of stakeholders, which was filed before this Tribunal. (Regulation 31 of Liquidation Process Regulations.) 

4.2 The Preliminary Report and Asset memorandum were filed on 27.10.2021 (Regulations 13 and 34). 

4.3 The Liquidator filed twelve quarterly progress reports in compliance with the Regulation 15 of Liquidation Process Regulations 

4.4 The Liquidator issued a call for Expressions of Interest (EOIs) via an eauction notice dated 30.09.2023. M/s. Safe Bharat Enterprises Private Limited emerged as the highest bidder, and a Letter of Intent was issued in favor of the purchaser. The purchaser has duly paid the sale consideration. Subsequently, IA No. 850 of 2024 was filed by the purchaser for reliefs & concessions, which was subsequently confirmed by this Authority in an order dated 29.07.2024. 

4.5 Subsequently, the Liquidator distributed the total realized amount of Rs. 255,481,988/- to the stakeholders in accordance with the order of priority set forth in Section 53 of the Insolvency and Bankruptcy Code (IBC), 2016. It is further stated that 100% of the amount was distributed to the stakeholders based on the waterfall mechanism. 

# 5. It is submitted that the SCC had classified certain assets as NonRealizable Recoverable Assets (NRRA). In accordance with the decision made during the 25th SCC meeting, an application under IA No. 1655 of 2024 for the distribution of unsold assets amongst the stakeholders was filed before this Tribunal. The Tribunal through its order dated 17.09.2024 has allowed this Application allowing distribution of NRRA amongst the stakeholders. After distribution of these NRRA, nothing remains in liquidation estate for realization and to distribute. 

# 6. In the light of above facts and circumstances of the case, the only point that emerges for consideration of the Tribunal is, Whether the Liquidation process of the Corporate Debtor can be closed? 

# 7. We heard the Ld. Counsel for the Liquidator Mr. G Kalyan Chakravarthy Liquidator Mr. Rajesh Chillale and perused the record. Point Whether the Liquidation process of the Corporate Debtor can be closed? 

# 8. Regulation 45 of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 reads as under: - 

• Regulation 45: Final report prior to dissolution. 

• (1) When the corporate debtor is liquidated, the liquidator shall make an account of the liquidation, showing how it has been conducted and how the corporate debtor’s assets have been liquidated. 

• 2) If the liquidation cost exceeds the estimated liquidation cost provided in the Preliminary Report, the liquidator shall explain the reasons for the same. 

• (3) The liquidator shall submit an application along with the final report and the compliance certificate in form H to the Adjudicating Authority for – (a) closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern; or (b) for the dissolution of the corporate debtor, in cases not covered under clause (a).

# 9. The Ld. Liquidator submits that, pursuant to public announcement for eauction 30.09.2023, M/s. safe Bharat Enterprises private Limited was declared as successful bidder to acquire the Corporate Debtor as a going concern. On-going through the facts aforementioned and the material placed along with the Application, it is evident that the assets of Corporate Debtor were sold to M/s. safe Bharat Enterprises private Limited for Rs.255,481,988/- as a going concern, It is seen from Form-H that the amount of Rs.255,481,988/- realized from the sale was distributed among the stakeholders as per Section 52 or 53 of the Code. The amount distributed to the amount claimed is 100%. The details of distribution of the realized amount are mentioned in the Final Report. M G S Reddy & Co., Chartered Accountants furnished certificate on receipts and payments account for the liquidation period on 31.07.2024. 

# 10. In light of the orders pronounced by this Authority in IA No. 1655 of 2024 filed by the Liquidator for the distribution of unsold assets. Further on going through the final report, it is evident that the Liquidator has successfully sold the Corporate Debtor as a going concern. Therefore, this is a fit case for the closure of the liquidation process. 

# 11. As a sequel to the above, we hereby order closure of the Liquidation proceedings against the Corporate Debtor viz. M/s. Kanakadhara Ventures Private Limited from the date of this Order, in terms of Regulation 45 (3) of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Consequently, the Liquidator stands relieved. 

# 12. The Liquidator is directed to send the copy of this Order within 7 days from the date of pronouncement to the Registrar of Companies, Hyderabad and hand over all the books and files of the Corporate Debtor M/s. Kanakadhara Ventures Private Limited which are in possession of the Liquidator to the successful bidder. 

# 13. The Registry is directed to communicate this order to the Registrar of Companies, Hyderabad for updating the master data. 

# 14. A copy of this order be also forwarded to the Insolvency & Bankruptcy Board of India, New Delhi. 

# 15. In terms of the above, IA No. 1721 of 2024 filed by the Liquidator appointed for M/s. Kanakadhara Ventures Private Limited (Corporate Debtor) for closure of Liquidation Process of the Company under Regulation 45 (3)(a) of Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016, is allowed and stands disposed of. Accordingly, the case file shall be consigned to records room. 

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Mr Raj Kumar Ralhan Liquidator of M/S SU KAM Power Systems Limited - With this order, the present application stands ALLOWED and the liquidation process stands closed. All the remaining/pending applications shall be proceeded in accordance to law.

 NCLT PB-ND (2022.11.02) in Mr Raj Kumar Ralhan Liquidator of M/S SU KAM Power Systems Limited [IA (IB) No.4087(PB)/2021 in CP (IB) No. 540(PB)/2017] held that; 

• With this order, the present application stands ALLOWED and  the liquidation process stands closed. All the remaining/pending  applications shall be proceeded in accordance to law

Excerpts of the Order;

# 1. The Present Application (IA 4087/2022) has been preferred by  the Applicant for the closure of the liquidation process on  account of the successful completion of the Sale of the Corporate  Debtor as a going concern in terms of the provisions of the Code.  read with Liquidation Regulations and consequent distribution of  proceeds in terms of Section 53 of the Code. 

# 2. Ld. Counsel, Ms. Misha for the Applicant made submissions and  has prayed for the following reliefs in the present application:  

• "(a.) Allow the present application and take note of the successful  completion of the liquidation process of the Corporate Debtor upon  the sale of the Corporate Debtor as a going concern to the  Successful Bidder and distribution of the proceeds in terms of  Section 53 of the Code; 

• (b.) Direct the closure of the liquidation process of the Corporate  Debtor in terms of Regulation 45(3) of the Liquidation Regulations; 

• (c). Pass such other order/orders as it may deem fit and proper in  the facts and circumstances of the case." 

Background Facts: 

# 3. Corporate Insolvency Resolution Process (CIRP) was initiated w.r.t  Corporate Debtor on 05.04.2018. On 15.11.2018, a resolution  plan was received from a consortium comprising of M/s Phoenix  ARC Ltd. and Mr. Kunwar Sachdev, ex-promoter/director of  orporate Debtor. It is submitted by the Liquidator that it was the   only Resolution Plan received in CIRP of the CD. It is further  submitted by the Liquidator that in relation to the CIRP of CD,  Mr. Kunwar Sachdev, ex-promoter/ Director of Corporate Debtor  made an attempt to claim the ownership of the brand SU KAM,  i.e. the most valuable asset of the CD. Another important fact is  that subsequent to issue of EOI,a total of 18 EOIS were received  by the RP. However, only the promoter consortium came forward  to submit the resolution plan. 

# 4. Liquidator submits that as per the findings of due diligence report  and the legal opinion obtained by the RP, the promoter  consortium was reported as ineligible in terms of Section 29(A)(h)  of the Code on account of certain enforceable personal guarantees  issued by Mr. Kunwar Sachdev in favour of certain financial  creditor of CD which had been invoked by the relevant lenders  but remained unpaid. 

# 5. Afterwards, RP made one more attempt to get a Resolution Plan  for the CD but no Resolution Plan was received in the fresh  attempt as well. Therefore on 19.03.2019 in the meeting of CoC,  RP apprised COC about the financial position of the CD and  informed that since no Resolution Plan had been received he  would be filing an application seeking liquidation before this  Tribunal. On the same date COC proposed to replace  to  Mr.  Rajiv  Chakraborty  with Mr. Raj kumar Ralhan as the RP of the CD vide order  dated  03.04.2019.

 

# 6. Upon the initiation of Liquidation proceedings of the Corporate  Debtor on 03.04.2019, the liquidator undertook the processes  and procedures as per the Code. Upon the failure of the first  auction, second and third public announcements was made  under regulation 32 and 33 of the Liquidation regulations to invite bidders for acquisition. 

# 7. The said sale of the Corporate Debtor has been undertaken  pursuant to the acceptance of bid of a consortium of individuals  namely Mr. Navraj Mittal (lead member), Mr. Vishnu Prakash  Goyal, Mr. Ashok Kumar Gupta and Mr. Yajan Bansal (the  "Successful Bidder") in the e-auction held on 12 October and  14 October, 2020 for acquiring the Corporate Debtor as a  going concern on "as is where is" basis and "as is what is" basis  in liquidation proceedings in accordance with the provisions of  the process document dated 31 August 2020 ("Process  Document") issued by the Liquidator, the Code and the  Liquidation Regulations. 

# 8. The Process Document specially contemplates approval of this  Hon'ble Adjudicating Authority. The acquisition plan dated 28  September 2020 (as amended dated 11 November 2020, 28 November 2020 and 10 December 2020) ("Acquisition Plan")  submitted by the Successful Bidder in the e-auction held on  12 October and 14 October, 2020 for acquiring the Corporate  Debtor as a going concern has been confirmed and approved  by this Hon'ble Adjudicating Authority vide order dated 11  May 2022 in IA 233/2021. Copy of the order of this  Adjudicating authority is annexed as Annexure A-1 in the  affidavit filed on behalf of the Liquidator. 

# 9. Liquidator submits that the Acquisition Plan was to be  implemented through various steps, inter alia, 

• (i) by way of  infusion of funds by the Successful Bidder in the Corporate  Debtor; 

• (ii) allotment of equity shares to the Successful Bidder  and/or their nominees; 

• (iii) reduction of the existing share capital of the Company; 

• (iv) reconstitution of the Board of  directors of the Corporate Debtor; and 

• (v) handover of the  control of the Corporate Debtor to the Successful Bidder  consortium. 

Liquidator further submits that the following steps  pertaining to the implementation of the Acquisition Plan have  been undertaken: 

Infusion of funds by the Successful Bidder: The Successful  Bidder consortium were required to infuse a total amount of  INR 49,95,00,000 (Rupees Forty Nine Crores Ninety-Five Lakhs  only) in the Corporate Debtor ("Total Consideration"). On  October 19, 2020, the Successful Bidder had already remitted  10% (ten percent) of the Total Consideration by way of RTGS  towards performance security. Further, the Successful Bidder  deposited the entire Balance Consideration (as defined under  the Acquisition Plan), on 21 May 2022 itself in the following manner:  

• INR 5,00,00,000 (Rupees Five Crores only) towards the  allotment of equity shares of the Corporate Debtor; and  

• INR 39,95,50,000 (Rupees Thirty-Nine Crores Ninety Five  Lakhs Fifty Thousand only) by way of unsecured loan.  

Accordingly, the Successful Bidder duly complied with the  undertaking given before this Hon'ble Tribunal as recorded in  the order dated 11 May 2022. Vide Order dated 06.07.2022 it  has been recorded that the Auction purchaser has deposited   the amount required to be paid in terms of e-auction and has  already filed an affidavit dated 06.07.2022. 

# 10. As far as distribution of funds is concerned, Liquidator  submits that in addition to the total Consideration, the  Liquidator had undertaken the sale of certain scrap assets  pursuant to which an amount of Rs. 4,76,471/- (Rupees Four Lakh Seventy Six Thousand Four Hundred and Seventy One only) has been  has been realized ("Scrap Value"). The Total  Consideration and Scrap Value are collectively referred to as  "Distributable Amount". To give effect to the provisions of  the Code, the Liquidator distributed the Distributable Amount in the manner as prescribed in Section 53(1) of the Code read with the Liquidation Regulations from 23 May 2022 to 06  June 2022. 

# 11. On perusal of the Application it was found that certain  information with respect to the Liquidation process was not  clear for which this Adjudicating Authority had asked for  certain clarifications vide order dated 06.09.2022. For the  same, Liquidator has filed an affidavit dated 17.09.2022 responding to the queries asked by this bench. 

# 12. The queries were with respect to the following:  

• payment of workman dues as there is some ambiguous  entry in Form H,  

• whether there are any workmen (at present) working  for the CD, 

• amount involved in CA No. 1090 (PB)/2018 filed  under section 43, 45 and 66 and whether the amount  forms the part of the liquidation estate or not, 

• other than the CA 1090/2018 and IA 4432/2020, if  there is any pending application? 

# 13. Liquidator stated that there has been an inadvertent error by  the Deponent as regards the Form H. As per the verification  undertaken by the Liquidator, there are a total of 186  individuals who have filed their claims and who fall within  the definition of workmen as prescribed under the provisions  of the Code. Further, for the period from April 2018 to April  2019 the admitted claims of the identified workmen was Rs.  62,67,550 (Rupees Sixty-Two Lakh Sixty- Seven Thousand  Five Hundred Fifty), and for the period from April 2017 to April  2018, the admitted claims of the workmen amounted to Rs.  11,73,247. Accordingly, the total admitted claim of the  identified workmen for a period of 24 months preceding the  liquidation commencement date was Rs. 74,40,797 (Rupees Seventy Four Lakh Forty Thousand Seven Hundred Ninety Seven) ("Total Workmen  Workmen Claim"). Out of the Total  Workmen Claim, an amount of Rs. 63,14.623 (Rupees  Sixty Three Lakhs Fourteen Thousand Six Hundred  Twenty Three) has been paid by the Liquidator. 

# 14. Liquidator further stated that in view of equal rank given to  workmen's dues and debts owed to secured creditors under  Section 53(1)(b) of the Code, on account of an inadvertent  error on part of the Liquidator, an amount of Rs. 47,073  (Rupees Forty-Seven Thousand Seventy Three) was found to  be due and payable to the workmen. It is respectfully  submitted that the said amount now stands fully paid and, in  this regard, the relevant proof of payments towards workmen  dues for the period of April 2017 to April 2018 dated  17.09.2022 have been annexed herein as ANNEXURE A-3.  

# 15. As far as the query of workmen (if any) working for the CD is  concerned, Liquidator submits that there have been no operations/ production in the factories of the Corporate  Debtor since January 2019 primarily on account of shortage  of funds to run the factories. It is to be noted that before CIRP  began, the business model of the Corporate Debtor was on a  credit basis i.e., credit received from suppliers. However,  owing to the initiation of the CIRP of the Corporate Debtor, the  suppliers were hesitant in providing credit. Accordingly, the Corporate Debtor was constrained to shift from a credit based  revenue model to a cash and carry mechanism wherein  distributors were required to provide an advance to the  Corporate Debtor in order to even initiate production of  batteries/inverters etc. as opposed to finding the same on the  shelf for ready purchase. This unavoidable shift in the model  of business of the Corporate Debtor in a competitive market  reduced the market reach and market share of the Corporate  Debtor leading to a liquidity crunch, which in turn led to the  complete non-functioning of the Corporate Debtor from  January 2019 itself when no more funds were available to run  the factories of the Corporate Debtor. As a consequence,it is  stated that there are no workmen in the Corporate Debtor  since January 2019 and the employees were discharged with effect from the date of initiation of liquidation of the Corporate   Debtor. 

# 16. Liquidator further stated that in the CA No. 1090(PB)/2018  filed under section 43, 45 and 66 of the Code ("Avoidance  Application"), the entire amount sought to be avoided under  the Avoidance Application is approximately Rs. 62 crores ;  however, on account of certain transactions being beyond the  look back period amounting to Rs. 25.44 crores (Rupees  Twenty Five Crore Forty Lakh Forty Four Thousand), the  amount involved under the Avoidance Application would be  Rs. approximately Rs. 36 crores. Further Liquidator stated  that above amounts under the Avoidance Application have not  been included within the liquidation estate. He highlighted that  the plan submitted by the Successful Bidder consortium  provides that the Successful Bidder shall have the right to  recover/proceed against any  against any party whose account is  recoverable in the books of the Corporate Debtor. Accordingly, the Avoidance Application shall be pursued by the Successful  Bidder and it is understood that the Successful Bidder are in  the process of taking the necessary steps with respect to the  same including but not limited to filing a substitution  application before this Hon'ble Tribunal to replace the  Liquidator for pursuing  the said application. 

# 17. As far as pending applications are concerned, liquidator stated  that apart from the Avoidance Application bearing CA  1090(PB)/2018 and IA. 4432/2020 (as already noted by this  Hon'ble Tribunal), the following are the pending applications  before this Hon'ble Tribunal in relation to the present liquidation  process:  . . . . ..

# 18. Additionally, the bank details of certain stakeholders of the  Corporate Debtor, to whom payments were required to be made  in terms of Section 53 (1) of the Code as aforesaid, were not  available with the Liquidator. In respect of the said stakeholders,  the Liquidator, in order to comply with its obligations under  Section 53 (1) of the Code and in the interest of such stakeholders,  caused the Corporate Debtor to issue demand drafts thereby duly  allocating amounts towards the said stakeholders.  

# 19. Further, an amount of Rs. 25,00,000 (Rupees Twenty-Five Lakhs  only b) is being held by the Liquidator in a fixed deposit for HDFC  Bank Limited (which realized its security interest in terms of Section  52 of the Code). This amount is subject to the outcome of the  application filed by HDFC Bank Limited bearing IA Number  4432/2020, before this Hon'ble Adjudicating Authority. Further,  in terms of the Acquisition Plan and the Plan Approval Order, an  amount of Rs. 1,00,00,000/- (Rupees One Crore) has been set.  aside as a corpus for any expenses that the Liquidator may incur  from the transfer date for liquidation related processes and form  filings. Further, in light of the conclusion of the process and  handover of the Corporate Debtor to the Successful Bidder in  accordance with the approved Acquisition Plan on 23 May 2022,  the Liquidator has issued the sale certificate on 31 May 2022  and thereafter proceeded to file the present application for taking  note of the sale of the Corporate Debtor as a going concern to the  Successful Bidder consortium 

# 20. A copy of the final report has been annexed as (ANNEXURE A-35)  in terms of the Liquidation Regulations containing inter-alia 

• (i) detailed compliance certificate in the manner set out in  Form- H of the Liquidation Regulations which inter alia  includes details pertaining to the distribution of the  Distributable Amount by the Liquidator; 

• (ii) the details of the undistributed proceeds in the manner set  out in Form-I of the Liquidation Regulations in terms of  Regulation 46 (5) of the Liquidation Regulations;  (iii)The details of the estimated Liquidation Cost in the  Preliminary Report and the actual Liquidation Cost  incurred; 

• (iv) Progress report from 01 April 2022 to 23 May 2022  successful bidders 

# 21. We have perused the application, documents annexed to the  application. On perusal, it is found that the balance 90% of the  consideration i.e. Rs 44,95,50,000/- has been remitted by  bidders to the bank account provided by the  Liquidator in compliance of the order dated 11.05.2022 by this  adjudicating authority. The Application is complete in all respects  as per the provisions of the code. Further, the pending IAS  4128/2021, 5243/2021, 4432/2022 and CA 1090/2018 were  listed for consideration on 19.09.2022 and are now to be  taken up on 18.11.2022. 

# 22. With this order, the present application stands ALLOWED and  the liquidation process stands closed. All the remaining/pending  applications shall be proceeded in accordance to law. Also, in  terms of the Acquisition plan and the plan approval order, an  amount of Rs. 1 crore has been set aside as corpus for any  expenses that the liquidator may incur. Liquidator is directed to  file the progress report (monthly) of the distribution of the  abovementioned amount till the full realization. 

# 23. Registry is directed to send a copy of this order to ROC as well as  IBBI. 

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