ASL Enterprises Ltd. Vs. Adi Ispat Pvt. Ltd. & Anr. - Learned Counsel for the Liquidator submitted that the sale was not as going concern sale and it was a sale of assets.

 NCLAT (2024.09.02) in ASL Enterprises Ltd.  Vs. Adi Ispat Pvt. Ltd. & Anr. .[Company Appeal (AT) (Insolvency) No. 1294 of 2024] held that; 

• Learned Counsel for the Liquidator submitted that the sale was not as going concern sale and it was a sale of assets.

Excerpts of the Order;

02.09.2024 Heard Counsel for the Appellant and Learned Counsel for the Liquidator Mr. Anoop Prakash Awasthi. 

This Appal has been filed against the order passed by the Adjudicating Authority dated 18.06.2024 in I.A. (IBC) (Dis) No.1687/KB/2023 filed by the Liquidator. 

The brief facts of the case are that in the liquidation proceeding of the Corporate Debtor, the Appellant was declared as Successful bidder in response to the public announcement dated 29.09.2022 issued by the Liquidator. After the Appellant was declared as Successful bidder an I.A. was filed by the Appellant being I.A. No.240/KB/2024 praying for reliefs and concession, the said I.A. was allowed by order dated 10.05.2024 passed by the Adjudicating Authority granting various reliefs and concessions. Copy of the order has been brought on the record at page 164 of the Appeal at Annexure A-3.

 It appears that Liquidator has filed the I.A. for dissolution of the Corporate Debtor being I.A. No.1687/KB/2023. It is submitted that the Appellant has deposited the entire sale consideration and the possession letter was also issued by the Liquidator on 04.02.2023 and sale agreement was executed on 20.03.2023. The order on the application for dissolution was reserved by the Adjudicating Authority on 04.01.2024 which was allowed by the Adjudicating Authority by the impugned order dated 18.06.2024. 

The Learned Counsel for the Appellant submits that in the application filed by dissolution, the Appellant was not made a party and Appellant was not heard when the Adjudicating Authority allowed the dissolution. It is submitted that Appellants could not bring into notice of the Adjudicating Authority of the earlier order dated 10.05.2024 by which order several reliefs and concession were granted and the order dated 18.06.2024 was passed in ignorance of the order dated 10.05.2024 which needs to be set aside. 

Learned Counsel for the Liquidator submitted that the sale was not as going concern sale and it was a sale of assets. The Learned Counsel for the Liquidator has referred to the reply, which has been filed by the Liquidator in the present appeal, he has referred to the sale notice dated 20.10.2022 which accorded to the Appellant was sale as ‘as is what is basis, whatever there is basis and no recourse basis’’. Learned Counsel for the Appellant submits that Liquidator has also filed an application before the Adjudicating Authority for recall of the order dated 10.05.2024, which is pending for consideration and listed for 04.09.2024. 

We have heard the Learned Counsel for the parties, and perused the record. 

From the facts which have been brought on record, it does appear that the Adjudicating Authority has passed the impugned order dated 18.06.2024 in ignorance of the earlier order dated 10.05.2024. Appellant being not before the Adjudicating Authority at the time of reserving the order on dissolution Application, the facts could not be noticed by the Adjudicating Authority. The Adjudicating Authority have already granted reliefs and concession by order dated 10.05.2024, the order impugned is passed ignorance of the order dated 10.05.2024, which order deserves to be set aside on this ground alone. We thus, allow the Appeal. Set aside the order dated 18.06.2024. 

The application for recall of order dated 10.05.2024 is still pending before the Adjudicating Authority. We direct that application for dissolution be also be listed before the Adjudicating Authority. The Adjudicating Authority may pass an order after hearing both the parties. 

The Appeal is disposed of. 

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Rahul Nareshbhai Shah Liquidator of Male Square Retails Pvt Ltd .- No assets are left with for any further disposal. Since the assets of the Corporate Debtor are completely liquidated, there remains nothing and no applications are pending in the matter.

 NCLT Ahd-1  (2015,07.05) in Rahul Nareshbhai Shah Liquidator of Male Square Retails Pvt Ltd . IA/383(AHM)2023 in CP(IB) 39 of 2020 ] held that; 

• The applicant/Liquidator submitted that he has conducted and completed the liquidation process of corporate debtor and has disposed of assets of the Corporate Debtor, M/s. Male Square Retail Private Limited. It is further stated that as all the assets of corporate debtor are liquidated and there being no other assets to be utilized for recovery of dues of the creditors/stakeholders,

• No assets are left with for any further disposal. Since the assets of the Corporate Debtor are completely liquidated, there remains nothing and no applications are pending in the matter.

Excerpts of the Order;

1. The present application being I.A. No.383 of 2023 in CP(IB): 39/9/NCLT/AHM/2020 has been filed by Mr. Rahul N. Shah, Liquidator of the Corporate Debtor, M/s. Male Square Retail Pvt. Ltd., under Section 54 of the Insolvency and Bankruptcy Code, 2016 for an order of dissolution by seeking relief as follows:- 

• “a. Your Lordship may be pleased to allow the present application. 

• b. Your Lordship may be pleased to pass an order under Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 14 and 45(3)(b) of the IBBI (Liquidation Process) Regulation 2016 seeking for the dissolution of the Corporate Debtor M/s. Male Square Retail Private Limited; 

• c. Your Lordship may be pleased to grant any other relief as may deem fit in the interest of justice.” 

# 2. The brief facts of the case as submitted by the applicant/ liquidator is as follows: 

(i) It is stated that the present application is filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 14 and 45(3)(b) of the IBBI (Liquidation Process) Regulation 2016 seeking for the Dissolution of the Corporate Debtor i.e., M/s Male Square Retail Private Limited. It is further submitted. that the Final Report dated 29.03.2023 along with Form-H in compliance of Regulation 45 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 is annexed herewith and marked as "ANNEXURE-A (COLLY)" to the present application.

(ii) It is submitted that, M/s. Male Square Retail Private Limited was incorporated on 18/06/2013 under the provisions of the Companies Act, 1956, bearing CIN No. U51909GJ2013PTC075668 and having its registered office situated at 339,3d Fl. Block-F, TPS14, Sumel Business Park - 6, Nr. Dudheshwar Circle, Dudheshwar Ahmedabad Gujarat 380004.

(iii) As stated, the Operational Creditor Mr. Hardik Fakirchand Shah Prop. of Cotton Hub had preferred and filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 seeking Initiation of Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor i.e. M/s. Male Square Retail Private Limited. 

(iv) It is stated that this Bench vide its order dated 27.04.2022 passed in CP (IB) No. 39/9/NCLT/AHM/2020 had admitted the application filed under Section 9 of the Code and initiated the CIRP of Corporate Debtor. Further in the same order this Bench appointed Mr. Rahul Nareshbhai Shah, as the Interim Resolution Professional ("IRP") of the Corporate Debtor. A copy of Admission Order dated 27.04.2022 is annexed at Annexure-A to the Final Report dated 29.03.2023 attached at Annexure-A of the present application. 

(v) It is submitted that there were no assets excepts loans and advances of the Corporate Debtor, the members of CoC in its Third Meeting dated 16.08.2022 resolved to initiate liquidation process of Corporate Debtor. Accordingly, an interlocutory application bearing IA No. 731 of 2022 in CP (IB) No. 39 of 2020 came to be preferred by the applicant seeking for liquidation of Corporate Debtor. The applicant submits that this Hon'ble Tribunal vide order dated 01.11.2022 passed an order of liquidation and further appointed applicant herein as liquidator of corporate debtor. A copy of Liquidation Order bearing IA No. 731 of 2022 in CP. 1st Progress Report IB No. 39 of 2020 dated 01.11.2022 is annexed at Annexure- B to the Final Report dated 29.03.2023 attached at as Annexure-A of the present application. 

(vi) It is submitted that, subsequently the Liquidator made the public announcement in the prescribed "Form B" as required under the Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 in English & Gujarati Newspaper i.e. "Financial Express" on 07.12.2022 and invited the claims from all the stakeholders of Corporate Debtor. A copy of public announcement in Form-B dated 07.12.2022 is annexed at Annexure-C to the Final Report dated 29.03.2023 attached at Annexure-A of the instant application. 

(vii) It is stated that the applicant/liquidator, in accordance with Regulation 15 of the IBBI (Liquidation Process) Regulations, 2016 prepared for the period 01.11.2022 to 31.12.2022 and submitted before this Bench on 12.01.2023. A copy of First Progress Report is annexed here and marked at Annexure-D to the Final Report dated 29.03.2023 attached at Annexure-A of the present application. 

(viii) It is stated that the applicant/ liquidator, in compliance of Regulation 13 of the IBBI (Liquidation Process) Regulations, 2016, prepared a Preliminary report along with Asset Memorandum and List of stakeholders and the same was filed with the registry of this Bench on 02.01.2023. The given details of the stakeholders are as under:

Sr. No.	Name of the Creditor	Amount Admitted (in Rs.)
	Mr. Shrenik Shah, Prop. Of Rajendra Mobile (Financial Creditor)	4,00,000/-
	Assistant State Tax Officer State Tax Department, Ahmedabad (Operational Creditor)	1,67,63,243/-
	Cotton Hub	24,42,730/-

A Copy of Preliminary Report along with Asset Memorandum and List of Stake holder is attached at Annexure- E of the Final Report dated 29.03.2023 of the present application. 

(ix) It is stated that, in accordance with Regulation 41 of the Liquidation Regulation, the applicant/Liquidator opened a new bank account in the name of Corporate Debtor 'in Liquidation', with Canara Bank on 01.07.2022, the Bank details are submitted as under:- 

Name of the Account	Male Square Retail Private Limited (In Liquidator)
Branch	Navrangpura, Ahmedabad
A/c. No	120001284012
IFSC Code	CNRB0000280

(x) It is stated that the applicant/Liquidator further submitted Preliminary Report within 75 days and an Asset Memorandum in accordance with Regulation 34 of the IBBI (Liquidation Process) Regulations, 2016 to this Tribunal on 04.01.2023. The copy of Preliminary Report, Assets Memorandum and List of Stakeholders are annexed at Annexure-E of the Final Report dated 29.03.2023 attached at Annexure-A of the present application. 

(xi) The Applicant/Liquidator submitted that in accordance with Regulation 15 of the IBBI (Liquidation Process) Regulations, 2016 has prepared 2nd Progress Report for the period 01.01.2023 to 28.03.2023 was submitted before this Tribunal on 12.01.2023. A copy of Second Progress Report is annexed here and marked at Annexure-F to the Final Report dated 29.03.2023 attached as Annexure-A of the present application. 

(xii) The applicant/Liquidator submitted that he has conducted and completed the liquidation process of corporate debtor and has disposed of assets of the Corporate Debtor, M/s. Male Square Retail Private Limited. It is further stated that as all the assets of corporate debtor are liquidated and there being no other assets to be utilized for recovery of dues of the creditors/stakeholders, the applicant conducted meeting of Stakeholders Consultation Committee on 11.11.2022 and 24.03.2023 wherein the Stakeholder Consultation Committee resolved for dissolution of corporate debtor company. A copy of the Minutes of the Minutes of the respective Meeting dated 11.11.2022 and 24.03.2023 is annexed as ANNEXURE G and ANNEXURE H to the Final Report dated 29.03.2023 attached at ANNEXURE A of the present application. 

# 3. The List of claims from the financial creditors received were submitted in the Final Report as under: 

# 4. The List of claims from Operational Creditors is also submitted as under: 5. This Bench, vide its order dated the applicant/ Liquidator further submitted the affidavit in compliance of this Bench’s order dated 12.01.2024. 

# 6. The Applicant/Liquidator submitted a tabulated representation of the realisation of the assets/sales as under. As submitted table shows, there was no asset or no amount recovered from the Corporate Debtor. 

# 7. The applicant/Liquidator submitted a tabulated representation of the distribution of proceeds as under:.

# 8. A perusal of the above table reveals that out of the total claimed amount of Rs.2,00,81,867/-, an amount of Rs.1,98,37,867/- was admitted, against which, total realisation was NIL. To meet the CIRP and Liquidation cost, one of the SCC member contributed an amount of Rs.1,00,000/-, leaving a NIL balance. 

# 9. The Applicant/Liquidator, in compliance of our order dated 08.05.2024, filed an affidavit vide inward diary no.D-4711 dated 18.06.2024, produced a copy of certificate of closure of the bank account issued by the Canara Bank and stated that the account was closed on 17.05.2024. The balance sheet produced by the Canara Bank shows that on 17.05.2024, there was a NIL Balance. 

# 10. We heard the Learned Counsel for the Applicant and perused the material available on record. At this juncture, it is relevant to point out Section 54 of the IBC, 2016 provides as follows:- 

• Section 54: “(1) Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor. 

• (2) The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.

• (3) A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered.” 

# 11. From the averments made in the Application along with the perusal of the final report and the Compliance Certificate filed in Form-H by the Applicant, it is seen that the Corporate Debtor has been completely liquidated. No assets are left with for any further disposal. Since the assets of the Corporate Debtor are completely liquidated, there remains nothing and no applications are pending in the matter. In the circumstances, as averred and as prayed for by the Applicant that an order for dissolution is to be passed by this Tribunal under Section 54(1) of the Code. 

# 12. Accordingly, in exercise of the powers conferred under Section 54(1) of IBC, 2016, we pass the following order:-. 

• i) The Adjudicating Authority in exercise of powers conferred to it under Section 54(2) of the IBC, 2016 orders that the Corporate Person (Applicant Company) viz., M/s. Male Square Retail Pv.t Ltd. having CIN No. U51909GJ2013PTC075668 stands dissolved from the date of this order. 

• ii) The Registry of this Bench and the Applicant/liquidator is directed to serve a copy of this order to the RoC concerned, Income Tax Department and also to the IBBI within seven days from this order for information and necessary action. 

• iii) The Applicant/Liquidator shall preserve physical or electronic copy of the reports, registers, and books of account referred to in Regulations 45A of the IBBI (Liquidation Process) Regulations, 2016 for at least eight years after the dissolution of the Corporate Debtor, either with himself or with an information utility.. 

• iv) Consequently, the Applicant/liquidator Mr. Rahul Nareshbhai Shah is hereby discharged from his duties and responsibilities as the liquidator of the Corporate Debtor. 13. In terms of the above, IA No.383 of 2023 in CP (IB) No. 39/AHM/2020 is allowed and stands disposed of. 

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Janak Jagivan Shah RP of Rainbow Infrabuild Pvt. Ltd. - This Tribunal observes that “only the Liquidator” is empowered to make an application to the Adjudicating Authority for the dissolution of a Corporate Debtor. As the liquidation process has not yet commenced in this matter, there is no specific provision that authorizes an early dissolution prior to the initiation of liquidation.

 NCLT Ahmedabad (2024.06.11) in Janak Jagivan Shah RP of Rainbow Infrabuild Pvt. Ltd. [IA (Dis)/14(AHM) 2024 in CP (IB)/71(AHM) 2023 ] held that; 

• This Tribunal observes that “only the Liquidator” is empowered to make an application to the Adjudicating Authority for the dissolution of a Corporate Debtor. As the liquidation process has not yet commenced in this matter, there is no specific provision that authorizes an early dissolution prior to the initiation of liquidation. 

Excerpts of the order;

# 1. The present Application IA(Dis.)/14(AHM)/2024 has been filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 r.w. Regulation 14 of IBBI (Liquidation Process) Regulations, 2016 r.w. Rule 11 of the NCLT Rules, 2016 by the Resolution Professional seeking relief as follows; 

• a) Your Lordships be pleased to allow this Interlocutory Application; 

• b) Your Lordships may be pleased to pass an order for dissolution of the Corporate Debtor namely Rainbow Infrabuild Pvt. Ltd. Bearing CIN U21098GJ2010PTC063364 and relieve the Applicant from his duties as the Resolution Professional; 

• c) Your lordships may be pleased to direct the Registrar of the Companies to update the status of the Corporate Debtor as dissolved pursuant to allowing of this application; 

• d) Your Lordships may be pleased to pass any other order as may deem fit in the interest of justice. 

# 2. It is submitted that the Corporate Debtor (CD) is a private limited company incorporated under the Companies Act, 1956 having its registered office at the address mentioned in the cause title of the application. M/s AVB Global Ventures Pvt. Ltd., one of the financial creditors of the CD filed an application u/s 7 of IBC 2016 on 17.03.2023 for initiation of Corporate Insolvency Resolution Process (CIRP) against the CD for having defaulted in payment of its outstanding dues of Rs. 2,38,95,357/-. 

# 3. It is submitted that this tribunal after hearing both the parties passed an order admitting the aforesaid petition, and appointed Mr. Janak Jagjivan Shah as Interim Resolution Professional (IRP) to commence the CIRP and also to directed the said IRP to make a public announcement as prescribed by the Code vide its order dated 09.11.2023 received on 10.11.2023. Further, the said IRP made public announcement in Form A inviting claims from the creditors of the corporate debtor in Financial Express (English) and Lokmitra (Gujarati) circulated in the state of registered office of corporate debtor and also uploaded the same over the web-portal of the IBBI. 

# 4. It is further submitted that the last date to receive the claims from creditor as mentioned in the public announcement was 24.11.2023. Pursuant to the receipt of claims from financial creditors, COC was constituted and a report certifying the constitution of COC and list of claims were filed with this tribunal by the IRP on 07.12.2023. Claims were also invited from the Income Tax Department and pursuant to the email dated 24.11.2023 sent to the Income tax department to file the claim, the IRP received claim of Nil Rupees from Income Tax Department vide claim form No. B dated 28.11.2023. 

# 5. 1 st CoC Meeting: 

a) The first COC meeting was held on 08.12.2023, wherein it was decided by the majority that the IRP (Mr. Janak Jagjivan Shah) will continue as Resolution Professional to carry out CIRP of CD.

b) Pursuant to the first meeting of COC held on 08.12.2023 the IRP/RP filed the progress report with the Hon'ble NCLT as Interlocutory Application No. 11/2024 which was taken on record dated 17.01.2024. 

c) In line with the discussion that took place in the 1" meeting of the CoC, the RP appointed two Registered Valuers under the provisions of the IBC 2016 to value the Securities and Financial Assets of the CD. It is important herein to mention that the CD had no land building and/or Plant & Machinery, thus, no valuers for those categories came to be appointed. Reports from the valuers were obtained by the RP. Copy of the Financial Statements as on CIRP Date and the Copy of Reports of the two registered valuers is attached in this application as Annexure G and Annexure H respectively. 

# 6. 2 nd CoC Meeting:

 a) It is submitted that the Applicant convened second meeting of COC on 06.01.2024. The CoC approved the minimum eligibility criteria for inviting Expression of Interest for submission of resolution plan. 

b) Resultantly, the RP issued Form G in the Lokmitra Gujarati newspaper and the Financial Express English Ahmedabad edition and over the web-portal of the IBBI. (Copy of Invitation of Expression of Interest (FORM-G) published by RP is annexed and marked as Annexure J). 

c) The RP also prepared and shared the Information Memorandum prepared by him. Copy of Information Memorandum is attached herewith and marked as Annexure K in the present application. 

# 7. 3 rd CoC Meeting: 

a) The Applicant further submitted that, he convened third meeting of COC on 06.02.2024. RP informed the member of COC that no expression of interest was received against the Invitation for Expression of Interest dated 07.01.2024. 

b) In the interest of resolution, it was resolved to republish the Invitation for Expression of Interest with reduced Eligibility criteria. The RP published revised form-G on 08.02.2024 in the Lokmitra Gujarati newspaper and the Financial Express English newspaper Ahmedabad edition and over the webportal of the IBBI. (Copy of revised FORM-G is attached herewith and marked as Annexure M.) 

# 8. 4 th CoC Meeting: 

a) It is submitted that the Applicant forthwith convened fourth meeting of COC on 28.03.2024. The RP informed the members of COC that he has admitted 2 more claims were received by him from financial creditors viz-a-viz Mr. Ajay Goenka and Mrs. Sangeeta Goenka; however they will not be a member of the COC because they are related parties to the CD. 

b) The RP also informed in the meeting that in spite of re-issuance of Invitation for expression of Interest, again no expression of interest was received and suggested for Liquidation of the CD. However, the members of COC enquired if they can directly opt for dissolution of the CD instead of going through the Liquidation process as there are no realisable assets in the CD and going through liquidation process would only increase their expenses without yielding any positive result. They asked the RP to obtain an expert's opinion for the same before proceeding any further. Copy of list of updated claims is annexed and marked as Annexure O in this application. 

# 9. 5 th CoC Meeting: 

a) It is submitted that the Applicant convened fifth meeting of COC on 29.04.2024 wherein the resolution for passing of liquidation was proposed by the RP. 

b) The CoC rejected the proposal for initiating the liquidation process and for appointment of liquidator. The CoC also did not consider contributing to the liquidation expenses and after a thorough deliberation and consideration of the expert's opinion, the CoC unanimously decided to proceed with the dissolution of the corporate debtor without resorting to the liquidation process and directed the RP to file an application before the Adjudicating Authority for the same. 

# 10. It is submitted that where the corporate debtor has no realisable assets, the liquidation would not yield any return with incurring of various costs such as publication costs, filing cost, and liquidator’s fee which, in fact, is in deviation with the Code's cardinal principle of value maximization. A copy of audited financial statement as on 31.03.2024 is attached as Annexure Q. An audited statement of receipts and payments for the CIRP period from 09.11.2023 to 04.05.2024 and bank account closure certificate issued by the bank dated 04.05.2024 along with bank statement showing nil balance and marked as closed are attached as Annexure R. 

# 11. The applicant in their submissions have relied on following precedents: 

• a) Naresh Kumar Munjal vs. M/s Laksh Foods Pvt. Ltd. and Ors., IA 6092/2022 of CP (IB) 1181/2018 (NCLT, New Delhi Bench). 

• b) Mr. Mandar Shrikant Wagh, IRP of M/s. Synew Steel Private Limited, I.A 435/2020 in CP (IB)/96/BB/2020 (NCLT Bengaluru Bench). 

• c) Shyson Thomas vs. Mr. Madhugiri Venkatarayappa Sudarshan, TA (AT) No.8 of 2021 CA (AT)(CH)(INS)/925/2020; order 9 I.A- 6092/2022 in CP(IB)-1181/ND/2018 dated 01.06.2023. (NCLAT Chennai). 

# 12. It is submitted that Regulation 14 of IBBI (Liquidation Process) Regulations provides for early dissolution of the corporate debtor. Extract of the regulation are reproduced as follows: 

• "14. Early dissolution any time after the preparation of the Preliminary Report, if it appears to the liquidator that- 

• (a) the realizable properties of the corporate debtor are insufficient to cover the cost of the liquidation process; and 

• (b) the affairs of the corporate debtor do not require any further investigation; he may apply to the Adjudicating Authority for early dissolution of the corporate debtor and for necessary directions in respect of such dissolution." 

# 13. It is pointed out by the applicant that conjoint reading of these provisions leads to the requirement of completion of the liquidation of the assets of the corporate debtor and subsequent application to the Adjudicating Authority by the liquidator for dissolution. The intent is that the assets of the corporate debtor should be completely liquidated and also the distribution be a made in terms of various provisions of the code and the associated regulations, which would then culminate the entire process and thus no purpose would be served by keeping the identity of the corporate debtor as a corporate person and as such the same is required to be dissolved. In many cases, the present one included, when there are no assets to be liquidated, a question arises as to how to comply with the regulation 14 which stipulates early dissolution, which requires the appointment of a liquidator who shall then make an estimate and say whether there are any assets worth liquidating and upon such a certification only an early dissolution application is to be filed. This leads to a dichotomy, as one hand we have assets of the corporate Debtor which can barely cover the CIRP costs and on the other hand we appoint another professional for liquidation, thus incurring additional cost. To get out of this predicament, it would be necessary and sufficient for the RP to certify and submit that there are no assets with the Corporate Debtor, which would satisfy the requirements of Section 54(a), in which case following a route of regulation 14 would be just academic. 

# 14. Lastly, it is submitted that in the instant case, since there are no assets with the Corporate Debtor and in absence of any contribution approved by the CoC, there would be insufficient funds to meet the Liquidation Expenses. Therefore, under the provisions of section 54 of the Code read with Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016 and Rule 11 of the NCLT Rules, 2016, the applicant pleads before this tribunal to consider the prayers in these applications. 

# 15. We heard the Learned Counsel for the Applicant and perused the material available on record. 

# 16. Observation of this Tribunal 

a) Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016 states that: 

• "14. Early dissolution any time after the preparation of the Preliminary Report, if it appears to the liquidator that- 

• (a) the realizable properties of the corporate debtor are insufficient to cover the cost of the liquidation process; and 

• (b) the affairs of the corporate debtor do not require any further investigation; he may apply to the Adjudicating Authority for early dissolution of the corporate debtor and for necessary directions in respect of such dissolution." 

b) Section 54 of the IBC, 2016 provides as follows: - 

• Section 54 “(1) where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor. 

• (2) The Adjudicating Authority shall on application filed by the liquidator under subsection (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly. 

• (3) A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered.” 

c) Upon a comprehensive examination of Regulation 14 of the IBBI (Liquidation Process) Regulations and Section 54 of the Insolvency and Bankruptcy Code, 2016, this Tribunal observes that “only the Liquidator” is empowered to make an application to the Adjudicating Authority for the dissolution of a Corporate Debtor. As the liquidation process has not yet commenced in this matter, there is no specific provision that authorizes an early dissolution prior to the initiation of liquidation. 

d) It has been observed that the Applicant, in his capacity as the Resolution Professional, has submitted a compliance certificate under Form-H in accordance with Regulation 45(3) of the IBBI (Liquidation Process) Regulations. Additionally, the Applicant has designated himself as the Liquidator under Annexures of this application. However, it is pertinent to note that no order for liquidation has been passed by this Tribunal to date. Consequently, there is no Liquidator or any authorized person in the capacity of the Liquidator who can file the said compliance certificate. 

e) It is seen that the applicant has not filed the copy of Transaction Audit Report along with its application and no averment has been made in this regard by the applicant. 

f) Applicant has attached the valuation report by two valuers, both of whom have given the valuation of Rs. 1535/- being cash and bank balance as on the CIRP commencement date and no value has been ascribed to any other current asset/fixed asset of the Corporate Debtor. Applicant has attached the audited financials of the Corporate Debtor as on 31.03.2023 and at page 191 of the application, is the audited balance sheet as on 31.03.2024. Perusal of the same reveals that the cash and cash equivalents as on that date were Rs. 1,44,880/- which are much more than the liquidation value ascribed by the two valuers. 

# 17. Based on the above observations and in exercise of the powers conferred under Section 54 of IBC, 2016, we are not inclined to order for dissolution of the Corporate Debtor at this stage. 

# 18. In light of the observations noted in paragraphs 16(e) and 16(f), the applicant is hereby directed to carry out transaction audit from 01.04.2020 to the date of commencement of the CIRP. 

#19. Accordingly, with the above directions, the present application i.e. IA(Dis)/14(AHM)/2024 in CP(IB)/71/AHM/2023 stands rejected and stands disposed of. RP may take appropriate action as per the law. 

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