Raksha Bullion vs Royal Refinery Private Limited

The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor by an order dated 13.11.2019, on a Section 9

Petition filed by the Financial Creditor, wherein Mr. Nandkishor Vishnupant Deshpande, was appointed as an Interim Resolution Professional (IRP).

Â

The Applicant then made the public announcement in Form A on 21.11.2019 for intimating commencement of CIRP and inviting claims from the

creditors of the Corporate Debtor.

The Applicant submits that the claims from one Financial Creditor and three Operational Creditors were admitted to the extent of a cumulative

amount of INR 46.71/- Crores. The details of the claims as on the date of the filing the present Application is as follows:

Pursuant to receipt of claims, the IRP constituted a Committee of Creditors (CoC) being the financial creditors in accordance with Section 21(1) of

the Code.

The first meeting of Committee of Creditors (CoC) was held on 17.12.2019. The second meeting of Committee of Creditors (CoC) was held on

10.01.2020 wherein the Applicant was confirmed and appointed as the Resolution Professional (RP) for the Corporate Debtor. The same was

intimated to this Tribunal on 13.02.2020. The third meeting of Committee of Creditors (CoC) was held on 24.02.2020. The fourth meeting of

Committee of Creditors (CoC) was held on 04.05.2020 and the fifth meeting of Committee of Creditors (CoC) was held on 13.08.2020, wherein the

discussions with regard to the EOI and the evaluation matrix was proposed by the Applicant, RP. However, CoC (YES Bank being the sole CoC

member) decided to defer the discussion.

The sixth meeting of Committee of Creditors (CoC) was held on 10.09.2020, wherein the CoC held that the sale of the Corporate Debtor is not

possible since it is not a going concern and accordingly, decided not to pursue the sale of the Corporate Debtor as a going concern under Section 230

of the Companies Act, 2013. The CoC submitted that there is no uniqueness to the business of the Corporate Debtor. Also, the Corporate Debtor with

limited fixed assets and not being a going concern, the CoC felt that there will not be any positive outcome of CIRP. Hence, the CoC decided to take

the Corporate Debtor into liquidation. The valuers submitted their valuation reports along with the fair market value and liquidation value to the

Applicant, pertaining to the plant and machinery of the Corporate Debtor. Accordingly, the fair market value and liquidation value are as under:

Thereafter, during the same sixth CoC meeting, the CoC member (Yes Bank being the sole financial creditor) with 100% voting approved the

resolution for Liquidation of the Corporate Debtor. The result of the e-voting is as follows:

Â

Since the E-voting results approved liquidating the Corporate Debtor by the Sole Financial Creditor, this application is filed for the liquidation of the

Corporate Debtor in terms of the provisions of Section 33 of the Code.

Thereafter, the CoC member (Yes Bank being the sole financial creditor), through its email dated 17.11.2020, informed about the change of

Liquidator from Mr. Nandkishor Vishnupant Deshpande to Mr. Arihant Nenawati. The same email is extracted below:

The Insolvency Professional, Mr. Arihant Nenawati, having IP Registration Number IBBI/IPA-001/IP-P00456/2017-18/10799, herein has given

his consent to act as a Liquidator of the Corporate Debtor in Form 2 which is annexed to the Application.

On hearing the submissions of the Applicant and on reading the Application and the documents enclosed therein, for the IRP has complied with the

procedure laid under the Code read with Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons)

Regulations, 2016, on verification, we are of the view that this is a fit case to pass liquidation order under sub-section 2 of Section 33 of the Code as

the CoC decided to liquidate the Corporate Debtor and accordingly this Bench orders:

a. that the Corporate Debtor be liquidated in the manner as laid down in the Chapter III of the Code by issuing Public Notice stating that the

Corporate Debtor is in liquidation with a direction to the Liquidator to send this order to the ROC under which this Company has been registered.

b. that Mr. Arihant Nenawati, Insolvency Professional is hereby appointed as Liquidator as provided under Section 34(1) of the Code.

c. that all the powers of the Board of Directors, key managerial persons, the partners of the Corporate Debtor hereafter ceased to exist. All these

powers henceforth vest with the Liquidator.

d. that the personnel of the Corporate Debtor are directed to extend all co-operation to the Liquidator as required by him in managing the liquidation

process of the Corporate Debtor.

e. that the Liquidator will charge fees for conduct of the liquidation proceedings in proportion to the value of the liquidation estate assets as specified

by the IBBI and the same shall be paid to the Liquidator from the proceeds of the liquidation estate under Section 53 of the Code.

f. that on having liquidation process initiated, 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.

g. that this liquidation order shall be a deemed to be 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.

Consequently, the Insolvency Professional, Mr. Arihant Nenawati, is appointed as the Liquidator as provided under section 34(1) of the Code. All

powers of the board of directors, key managerial personnel and the partners of the Corporate Debtor, as the case may be, shall cease to have effect

and shall be vested in the liquidator.

Accordingly, this Application is hereby allowed directing the Liquidator appointed in this case to initiate liquidation process as envisaged under

Chapter-III of the Code by following the liquidation process given in the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations,

2016.