Completion of Liquidation Process Entitles Corporate Debtor to Dissolution u/s 54 of IBC: NCLT [Read Order]

The National Company Law Tribunal (NCLT), Principal Bench New Delhi has ordered the dissolution of AVJ Infrastructure Private Limited under Section 54 of the Insolvency and Bankruptcy Code, 2016 (IBC) and held that completion of the liquidation process and exhaustion of all realisable assets entitled the Corporate Debtor to dissolution.

The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor had commenced pursuant to an order dated September 30, 2019 in a petition filed by Oriental Bank of Commerce. Subsequently, the company was pushed into liquidation on November 6, 2020, after failure of the resolution process.

During the liquidation proceedings the Liquidator issued public announcements inviting claims constituted the Stakeholders Consultation Committee (SCC) appointed registered valuers and filed periodic progress reports before the Adjudicating Authority. Ten SCC meetings were convened during the liquidation period.

The Liquidator submitted that apart from certain movable assets and Not Readily Realisable Assets (NRRAs) including avoidance transaction proceedings there were no further assets capable of being liquidated or distributed among stakeholders under Section 53 of the IBC. The SCC with 100% voting share approved assignment of the NRRAs and pending avoidance applications to Bellcore Management Services Pvt. Ltd.

It was further submitted that all statutory compliances under the liquidation framework had been completed including filing of the Final Report and Form-H compliance certificate. The Liquidator also informed the Tribunal that the liquidation account maintained with ICICI Bank carried a nil balance and would be closed upon dissolution.

Observing that all requirements under Section 54 and Regulation 45 stood satisfied, the Tribunal held that there remained no impediment to dissolution of the Corporate Debtor. The Bench further clarified that pending avoidance transaction proceedings assigned as NRRAs would thereafter be pursued by the assignee in accordance with the assignment agreement.

Accordingly, the Bench comprising Bachu Venkat Balram Das and Ravindra Chaturvedi passed the order while allowing an application filed by the Liquidator allowed the dissolution application and directed the Registry to communicate the order to the Registrar of Companies and the IBBI within seven days.

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