CAUSE TITLE:
M/s. Pillar Industries India Private Limited
DATE OF ORDER:
10-04-2023
JUDGE(S):
.Ashok Kumar Bhardwaj, Member (Judicial) Sameer Kakkar, Member (Technical)
SUBJECT
The National Company Law Tribunal has ordered that M/s Pillar Industries India Private Limited be dissolved by section 59 of the 2016 Insolvency and Bankruptcy Code in the case of M/s Pillar Industries India Private Limited. The case was heard by the Chennai bench, which was made up of Ashok Kumar Bharadwaj, a judicial member, and Sameer Kakar, a technical member.
As a result, the company through its liquidator filed a petition with the NCLT Chennai bench to begin the voluntary liquidation process.
FACTS
- In the instance case, the corporation was formed on March 11, 2020, however, it was unable to begin business activities because of the COVID-19 epidemic. As a result, there are two directors of the firm who have invested capital in the company and stated solvency on August 16, 2021. As a result, the company has no debt, and its assets total Rs. 8,86,42,273.
- The bench noted that public notices for the start of liquidation proceedings and the inviting of claims were made. As a result, no claims were received against the corporation, and the corporation had no creditors. The Liquidator has also submitted a preliminary report dated September 20, 2021, by Regulation 9(1) of the IBBI (Voluntary Liquidation Process) Regulation, 2017. As a result, the final report required under Regulation 25 of The Regulations, 2017 was also filed with the Registrar of Companies and the Insolvency and Bankruptcy Board of India.
Analysis of the decision
- In this case, the National Company Law Tribunal observed and authorized the Dissolution application after determining that it was by the Insolvency and Bankruptcy Code, 2016, and the Regulation, 2017.
- Since 2019, the company has been undergoing a corporate insolvency resolution process (CIRP), which is an IBC framework for reviving insolvent enterprises. During the CIRP, the corporation was obligated to develop a resolution plan within a certain time frame. However, in this case, the company failed to establish a resolution plan within the time frame specified, and as a result, the NCLT ordered the company's liquidation.
- The liquidation process begins with the appointment of a liquidator, who takes possession of the company's assets and liabilities and is in charge of selling the assets to repay creditors. In this situation, the NCLT-appointed liquidator will sell the company's assets, and the revenues from the sale will be used to repay the creditors.
- This order emphasizes the necessity of timely resolution plans in the IBC's CIRP procedure. Companies undergoing CIRP should seek to develop a resolution plan within the time frame specified by the law, failing which they may risk liquidation and dissolution. It also emphasizes the repercussions of failing to comply with the IBC's rules, which can result in harsh penalties and legal action.
- Subsequently, the NCLT's ruling dissolving MS Pillar Industries India Private Limited serves as a reminder of the importance of following the terms of the IBC and the need for prompt resolution plans in the CIRP process. It also serves as a caution to other organizations undergoing CIRP to follow the dates and standards outlined in the IBC to avoid similar repercussions.
