Apundarik Merchants Private Limited vs Citylife Retail Private Limited

Balraj Joshi, Member (Technical)

This Adjudicating Authority convened through hybrid mode.

This is an application filed by the Resolution Professional seeking liquidation of the Corporate Debtor, viz., Citylife Retail Private Limited (CIN: U52100WB2006PTC111555), on the ground that no Resolution Plan received by him and the CoC by 84.54% voting share approved liquidation of the Corporate Debtor.

This Adjudicating Authority vide its order dated 31/05/2021 on a Petition filed by Apundarik Merchants Private Limited (Financial Creditor) under section 7 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) directed initiation of the Corporate Insolvency Resolution Process (‘CIRP’) against the Corporate Debtor and appointed the Applicant herein as the Interim Resolution Professional (‘IRP’), a copy of the said order dated 31/05/2022 is annexed with the application as Annexure “A”. At the first CoC meeting held on 30/06/2021 IRP was confirmed as RP.

In terms of section 15 of the Code, public announcement in Form ‘A’ was made on 02.06/2021 in “Financial Express” (English), Kolkata, Bangalore, Delhi and Mumbai editions and “Ekdin” (Bengali), “Dainandin Barta” Assam edition, “Jansatta” Chandigarh, Delhi, Kolkata and Lucknow editions, “Pratidin”) Orissa edition and “Sanmarg” Patna, Ranchi and Bhopal editions inviting claims from the creditors. The same was also uploaded in the designated website of the IBBI also. Copies of newspaper publications along with screenshot taken from IBBI website are annexed with the application and collectively marked as Annexure “C”. Accordingly, Committee of Creditors (“CoC”) was duly formed.

The applicant herein, in consultation with the CoC, had published the first Form “G” on 14/08/2021 inviting Expression of Interest (“EoI”) from prospective resolution applicants. However, no EoI was received. Thereafter, the applicant again on 25/09/2022 had published Form “G” for 2nd time but this time also no EoI was received from any prospective resolution applicants. For the 3rd time, Form “G” was published on 22/11/2021. In response, two EoIs were received, one from Mr. Sumit Khanna and another from Sanvie Retail Private Limited. However, Sanvie Retail Private Limited was found not eligible as per the eligibility criteria decided by the CoC and Mr. Sumit Khanna withdrew himself from participating in the resolution process. Since no EoIs in hand, the applicant again had published Form “G” for the fourth time on 02/04/2022 inviting EoI from prospective resolution applicants, however, all his efforts became futile. Copies of Form “G” published from time to time are annexed with the application and collectively marked as Annexure “D”.

Vide order dated 12/01/2022 passed in IA(IBC)1002(KB)2021, this Adjudicating Authority had granted 90 days exclusion along with 90 days extension, thereby the CIRP period has come to an end on 25/05/2022, a copy order dated 12/01/2022 is annexed with the application marked as Annexure “E”.

Altogether, six progress reports have been filed by the RP. RP has also held a total of six CoC meetings altogether.

Based on transaction audit report, the applicant has filed an application being IA(IB)/256(KB)2022 and the matter was heard on 05/05/2022. A copy of the order dated 05/05/2022 is annexed with the application marked as Annexure “F”.

At the 6th CoC meeting held on 12/05/2022, CoC decided with 84.54% voting share for liquidation of the Corporate Debtor u/s. 33(1)(a) of the Code since no Resolution Plan was received for consideration from anyone. A copy of the minutes along with notice, voting sheet and scrutinizer report of the said 6th CoC meeting is annexed with the application and collectively marked as Annexure “H”. At the said 6th CoC meeting, CoC has further decided to sell the Corporate Debtor as per regulation 39C of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and has further approved appointment of Mr. Anneel Saraogi, the applicant, as the Liquidator of the Corporate Debtor, who has given his consent to act as Liquidator of the Corporate Debtor. A copy of the written consent given by the RP dated 12/05/2022 is annexed to the application as Annexure “G”.

Section 33(1)(a) of the Code mandates that the Adjudicating Authority shall pass an order of liquidation where no resolution plan is received before the expiry of the CIRP. Sub-section (2) thereof requires the Adjudicating Authority to pass the liquidation order where the Resolution Professional intimates to the Adjudicating Authority the decision of the Committee of Creditors approved by not less than 66% of the voting share to liquidate the Corporate Debtor.

On conjoint reading of these two provisions, this Adjudicating Authority is left with no option but to order liquidation of the Corporate Debtor.

This Bench, therefore, hereby orders as follows: -

a. IA(IBC)/486(KB)2022 filed by Mr. Anneel Saraogi, RP of Citylife Retail Private Limited, the Corporate Debtor, is allowed and the Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof.

b. Mr. Anneel Saraogi [Reg. No. IBBI/IPA-001/IP-P01320/2018-2019/12099], E-mail ID: anneelsaraogi@gmail.com, telephone no. 9433013979, is hereby appointed as liquidator as provided under section 34(4)(c) of the Code, subject, however, to his possessing a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which he is a professional member, in terms of regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2019.

c. The Liquidator shall initiate liquidation process as envisaged under Chapter-III of the Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

d. Public Notice shall be issued in the same newspapers as published earlier stating that the Corporate Debtor is in liquidation.

e. All the powers of the Board of Directors, and of key managerial persons, shall cease to exist in accordance with section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator.

f. The personnel of the Corporate Debtor are directed to extend all assistance and co-operation to the Liquidator as required by him in managing the liquidation process of the Corporate Debtor.

g. On initiation of the liquidation process but subject to section 52 of the Code, no suit or other legal proceeding shall be instituted by or against the Corporate Debtor save and except the liberty to the liquidator to institute suit or other legal proceeding on behalf of the Corporate Debtor with prior approval of this Adjudicating Authority, as provided in section 33(5) of the Code read with its proviso.

h. In accordance with section 33(7) of the Code, this liquidation order shall be deemed to be a notice of discharge to the officers, employees, and workmen of the Corporate Debtor except to the extent of the business of the Corporate Debtor continued during the liquidation process by the Liquidator.

i. In terms of section 33(1)(b)(iii), the Liquidator shall file a copy of this Order with the Registrar of Companies, West Bengal, Kolkata, within whose jurisdiction the Corporate Debtor is registered. Additionally, the Registry shall also forward a copy of this Order to the Registrar of Companies, West Bengal, Kolkata.

The application bearing IA(IBC)/486(KB)2022 shall stand disposed of in terms of the above directions.

CP(IB)/658(KB)2020 to come up for filing of periodical report on 12/12/2022.

The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.