2021 (7) TMI 1172 - Tri - Insolvency and Bankruptcy

Dissolution of Corporate Debtor - 54(1)(a) and Regulation 14 of IBBI (Liquidation Process Regulations 2016 or any other provisions of Insolvency and Bankruptcy Code 2016 - HELD THAT - It is a fact on record that there are no realizable assets held by the Corporate Debtor so as to form a Liquidation Estate and to distribute the proceeds thereof. Accordingly this Adjudicating Authority in exercise of the powers conferred under Section 54(2) of the I B Code 2016 deems it proper to pass an order of the dissolution of the Corporate Debtor. Thus Corporate Debtor herein i.e. M/s. Sristek Clinical Research Solutions Limited stands dissolved from the date of this order. Liquidator also stands relieved. In the instant case however neither any compromise or arrangement could be arrived at u/s. 230 of the Companies Act nor any amount was realized or distributed by the Liquidator. Moreover the only Claimant is the original applicant/Operational Creditor - The original applicant/Operational Creditor shall reimburse the liquidation cost of Rs. 1, 09, 450/- to the Liquidator - A lump sum fee of Rs. 1, 00, 000/- will be paid by the original applicant/Operational Creditor to the Liquidator for performing his duties. Application disposed off.

Summary

Issues:
- Application for dissolution under Section 54(1)(a) and Regulation 14 of IBBI (Liquidation Process) Regulations, 2016
- Approval for payment of expenses and fee to the Liquidator

Analysis:
1. Application for Dissolution: The case involved an application for dissolution filed by the Liquidator under Section 54(1)(a) and Regulation 14 of IBBI (Liquidation Process) Regulations, 2016. The Corporate Debtor, M/s. Sristek Clinical Research Solutions Limited, had no realizable assets to form a Liquidation Estate for distribution. The Adjudicating Authority, in the exercise of powers under Section 54(2) of the I & B Code, 2016, ordered the dissolution of the Corporate Debtor, relieving the Liquidator from duty.

2. Payment of Expenses and Fee: The Liquidator, who bore all liquidation costs amounting to &8377; 1,09,450, requested reimbursement and a monthly fee of &8377; 75,000 for his services. The original Applicant/Operational Creditor agreed to reimburse the liquidation cost but contested the fee amount. Regulation 2A of IBBI (Liquidation Process) Regulations, 2016, mandates the CoC to contribute to liquidation costs. Regarding the Liquidator's fee, Regulation 4 of the same regulations stipulates that it should be decided by the CoC or based on certain criteria in the absence of CoC decision.

3. Resolution on Fee Payment: In this case, no compromise or arrangement was reached under Section 230 of the Companies Act, and no amount was realized or distributed by the Liquidator. Given these circumstances and the sole claimant being the original Applicant/Operational Creditor, the Adjudicating Authority directed the Operational Creditor to reimburse &8377; 1,09,450 as liquidation cost and pay a lump sum fee of &8377; 1,00,000 to the Liquidator for his services.

4. Post-Dissolution Procedures: Upon dissolution, the Liquidator was instructed to hand over the Company records to IBBI and inform the relevant authority where the Corporate Debtor is registered within 7 days. The Adjudicating Authority disposed of the application, marking the conclusion of the proceedings.

This detailed analysis of the judgment from the National Company Law Tribunal, Hyderabad Bench, highlights the key issues of the application for dissolution and approval for payment of expenses and fees to the Liquidator, providing a comprehensive understanding of the legal proceedings and decisions made by the Tribunal.