Mr. Navin Khandelwal Applicant /RP in the matter of Pradhvi Multitrade Private Limited Vs. Nano Minpro Private Limited. - The objectives of the Code are for resolution and not for winding up the company. Further, there is no provision for the direct dissolution of a corporate debtor without undergoing the CIRP and liquidation process.

 NCLT Mumbai (2026.05.07) Mr. Navin Khandelwal Applicant /RP in the matter of Pradhvi Multitrade Private Limited Vs. Nano Minpro Private Limited. [I.A. (DIS.) No. 28 of 2024 IN C.P. (IB) No. 302/MB/2021] held that;-.

• In other words, an application for dissolution of the Corporate Debtor can only be made after the CIRP and liquidation processes, once the Corporate Debtor's assets have been fully liquidated.

• It is pertinent to note that the objective of IBC is insolvency resolution of corporate persons in a time-bound manner. In the event that the resolution of the corporate debtor is not possible, liquidation is ordered as a last resort.

• The objectives of the Code are for resolution and not for winding up the company. Further, there is no provision for the direct dissolution of a corporate debtor without undergoing the CIRP and liquidation process.

• Furthermore, the Applicant has not satisfactorily demonstrated the necessity for the exercise of the Tribunal's inherent powers to meet the ends of justice. In any case, inherent powers under Rule 11 of the National Company Law Rules, 2016 (NCLT Rules) cannot be exercised by the Adjudicating Authority against the mandatory provisions of Chapters II and III of Part II of the IBC.

• The Tribunal is satisfied that the proceedings were initiated for a purpose other than the resolution of the Corporate Debtor, and that the continuation of the proceedings will not serve any purpose. In the circumstances, we order the termination of the CIRP and discharge the Applicant from the responsibilities as the RP of the Corporate Debtor.

Excerpts of the Order;

# 1. The present Application is filed under Section 54(1) of the Insolvency and Bankruptcy Code, 2016 (Code) by Mr. Navin Khandelwal, the Resolution Professional (Applicant) of Nano Minpro Private Limited (Corporate Debtor), seeking direct dissolution of the Corporate Debtor.

# 2. Brief Facts 

2.1. The Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor was initiated on an application filed by Pradhvi Multitrade Private Limited under Section 9 of the Code, by this Adjudicating Authority vide order dated 12.04.2023, whereby the Applicant was appointed as the Interim Resolution Professional (IRP) and was subsequently confirmed as the Resolution Professional (RP).

2.2. The IRP made public announcement and, upon collation of claims, constituted the Committee of Creditors (CoC), comprising a sole member, namely, Pradhvi Multitrade Private Limited.

2.3. The Applicant submits that the business operations of the Corporate Debtor have been completely shut down for the past three years and that the Corporate Debtor presently does not possess any physical assets. It is further submitted that the Corporate Debtor maintained a bank account with Axis Bank, Mulund West Branch, bearing A/c No. 912020042895031, with a balance of Rs. 11,471.35, and another account with Axis Bank, Vijay Nagar Branch, Indore, Madhya Pradesh, bearing A/c No. 923020041172991, which has a nil balance.

2.4. The Applicant submits that Form G was published on 23.06.2023. Pursuant thereto, Nakshatra Corporate Advisors Limited submitted an Expression of Interest (EOI); however, neither any Resolution Plan was received within the stipulated time, nor was any request made for extension of time.

2.5. In the 7th meeting of the CoC held on 05.12.2023, the RP informed the CoC that, as per the draft valuation reports received from both registered valuers, the fair value and liquidation value of the assets of the Corporate Debtor were assessed at Rs. 11,471/-, comprising only the cash and bank balance. After deliberations, the sole CoC member advised against reissuing Form G, given that the Corporate Debtor had no realisable assets, as per the valuation reports.

2.6. In the said 7th CoC meeting, the sole CoC member, with 100% voting share, resolved to approve the direct dissolution of the Corporate Debtor on account of the absence of assets for distribution. The relevant extract of the resolution is reproduced below:

2.7. Thereafter, the RP filed an application under Section 54 of the Code seeking dissolution of the Corporate Debtor. However, the said application was dismissed by the Adjudicating Authority in view of the contradictory resolutions passed by the CoC, as recorded below:

2.8. Subsequently, the RP convened the 8th CoC meeting on 13.03.2024 to seek clarification regarding the course of action, whether liquidation or dissolution of the Corporate Debtor. In the said meeting, the sole CoC member resolved to proceed with the dissolution of the Corporate Debtor under Section 54 of the Code. It was further clarified as follows:

• “RESOLVED THAT the Committee of Creditors of Nano Minpro Private Limited under CIRP be and hereby recommend/approve that the Corporate Debtor is to be dissolved as per the Section 54 of the Insolvency & Bankruptcy 2016 since there were no assets in the corporate debtor and authorized the RP Shri Navin Khandelwal to move an application for dissolution of the Corporate Debtor before the Adjudicating Authority after engaging professional as per section 54 of the Code 2016.”

• “The Bench notes that the Committee of Creditors (CoC) passed resolutions in its meeting held on 07.12.2023. In one resolution they have passed for ‘dissolution of the Company’ and in another resolution they have passed for ‘liquidation of the Company’ with 100% voting of the CoC members. Counsel for the RP submits that in view of the contradictory resolutions of the CoC, clarification is needed from the CoC and hence wishes to withdraw the Application. Permission granted.”

2.9. The Applicant submits that the Corporate Debtor does not own any assets, no distribution has been made to the creditors, and the CIRP costs remain unpaid. There have been no receipts or payments since the commencement of CIRP. The Applicant has also obtained a certificate from Sanyam Dakh & Associates, Chartered Accountants, certifying that there were nil receipts and payments during the period from 12.04.2023 to 10.01.2024.

2.10. In view of the above, and considering that the Corporate Debtor has no assets and to avoid incurring further CIRP or liquidation costs, and in accordance with the CoC’s resolution passed with 100% voting share, the Applicant seeks dissolution of the Corporate Debtor.

# 3. Analysis and Findings

3.1. We have heard the Ld. Counsel appearing for the Applicant and perused the Application and the documents on record.

3.2. The CIRP of the Corporate Debtor was initiated at the instance of the Operational Creditor. While admitting the application, the Tribunal noted that no proof of receipt of goods by the Corporate Debtor has been filed, and no acknowledgment of any liability arising from the supply of goods. Subsequently, the IRP admitted the Operational Creditor as the only member of the CoC. Though there is an open charge on book debts in favour of Punjab National Bank, no claim was filed by it. Pursuant to the constitution of the CoC, eight CoC meetings were convened. But instead of taking steps to explore possible resolutions, the CoC passed a resolution for the dissolution of the Corporate Debtor without undergoing the liquidation process under the IBC.

• “Further the CoC member also said that earlier the decision related to liquidation was taken saying that “recommend the liquidation if dissolution is not possible” because at that time we are not clear whether direct dissolution is possible or not hence both the decision were taken. However, our opinion is clear that we want to proceed for dissolution of the Corporate Debtor.”

3.3. Before considering the merits of the case, it is necessary to refer to the relevant provisions contained in Section 54 of the IBC, which reads as under:

• “54. (1) Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such Corporate Debtor.

• (2) The Adjudicating Authority shall on Application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.

• (3) A copy of an order under subsection (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered". (Emphasis added)

3.4. A plain reading of Section 54 makes it clear that an application for dissolution of the Corporate Debtor is to be filed by the Liquidator and not by the IRP/RP of the Corporate Debtor. Further, the application for dissolution is to be filed after the assets of the Corporate Debtor have been completely liquidated. In other words, an application for dissolution of the Corporate Debtor can only be made after the CIRP and liquidation processes, once the Corporate Debtor's assets have been fully liquidated. The present Application is filed by the RP based on the Resolution passed by the CoC, on the ground that the Corporate Debtor has no assets.

3.5. It is pertinent to note that the objective of IBC is insolvency resolution of corporate persons in a time-bound manner. In the event that the resolution of the corporate debtor is not possible, liquidation is ordered as a last resort. This, however, does not imply that the provisions of the Code can be used for the purpose of directly dissolving the Corporate Debtor, without undergoing the due process of liquidation. If the initiation of CIRP is not for resolution but for the dissolution of a corporate entity, alternative legal modes exist that specifically govern the winding-up process. The objectives of the Code are for resolution and not for winding up the company. Further, there is no provision for the direct dissolution of a corporate debtor without undergoing the CIRP and liquidation process. Furthermore, the Applicant has not satisfactorily demonstrated the necessity for the exercise of the Tribunal's inherent powers to meet the ends of justice. In any case, inherent powers under Rule 11 of the National Company Law Rules, 2016 (NCLT Rules) cannot be exercised by the Adjudicating Authority against the mandatory provisions of Chapters II and III of Part II of the IBC.

# 4. Rule 11 of the NCLT Rules states as under:

• “11. Inherent Powers – Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal".

4.1. Given the circumstances, we are of the considered view that the Application is devoid of merit and liable to be dismissed. Accordingly, IA (DIS.) No. 28 of 2024 is dismissed. However, the Tribunal is satisfied that the proceedings were initiated for a purpose other than the resolution of the Corporate Debtor, and that the continuation of the proceedings will not serve any purpose. In the circumstances, we order the termination of the CIRP and discharge the Applicant from the responsibilities as the RP of the Corporate Debtor. Accordingly, the CP No. 302/2021 is dismissed and closed to avoid abuse of the process under the Code. File be consigned to records.

4.2. The Registrar is directed to forward an electronic version of this Order to the Insolvency and Bankruptcy Board of India for information and record.

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M/s Goyal Tea Agencies Private Limited Vs. M/s Shakti Bhog Snacks Limited - In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law.

  NCLT ND-II (2025.30.06) in M/s Goyal Tea Agencies Private Limited Vs. M/s Shakti Bhog Snacks Limited [IA-3695-2023 In IB-1713-2019] held that;

• In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law.

• NCLAT in Sterling Biotech, Manohar Lal Vij, and other matters, has clearly held that the National Company Law Tribunal ("NCLT") and the National Company Law Appellate Tribunal ("NCLAT") do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution.

• This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative.

• The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code.

Excerpts of the order;

# 1. This Application has been filed by Mr. Umesh Gupta, the Resolution Professional of M/s. Shakti Bhog Snacks Limited before this Adjudicating Authority under Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016. The Applicant / Liquidator seeks the following reliefs:

• “a. Pass an order of dissolution of the corporate debtor M/s Shakti Bhog Snacks Limited

• b. Pass an order that Resolution Professional stands discharged upon passing order of dissolution.

• c. Pass any other or further directions as this Hon’ble NCLT may deem fit”

# 2. BRIEF BACKGROUND OF THE CASE:

i. An Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was filed by the Operational Creditor, M/s Goyal Tea Agencies Private Limited, against the Corporate Debtor, M/s Shakti Bhog Snacks Limited, which came to be admitted by this Hon’ble Adjudicating Authority vide order dated 03.01.2023, whereby a moratorium under Section 14 of the Code was declared and Mr. Umesh Gupta was appointed as the Interim Resolution Professional. Thereafter, his appointment was duly confirmed as the Resolution Professional by the Committee of Creditors in its 1st meeting held on 02.02.2023.

ii. In compliance with Section 13, Section 15, and other applicable provisions of the Insolvency and Bankruptcy Code, 2016, read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), the Interim Resolution Professional caused a public announcement to be made, intimating the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Shakti Bhog Snacks Limited, and inviting claims from its creditors along with proof of such claims. The said announcement was published in the Hindi edition of Jansatta and the English edition of Financial Express on 06.01.2023, with the last date for submission of claims stipulated as 17.01.2023.

iii. Pursuant to the public announcement inviting claims from all classes of creditors, including Financial Creditors, Operational Creditors, employees and workmen, the Interim Resolution Professional received only one claim, from the Financial Creditor, i.e., State Bank

of India, up to the last date of submission, i.e., 17.01.2023. No claims were received from any operational creditors, employees, or workmen. Accordingly, in compliance with Section 21(1) of the Code, the Interim Resolution Professional constituted the Committee of Creditors on 25.01.2023, comprising State Bank of India as its sole member. Thereafter, the report for constitution of the Committee of Creditors was filed by the Interim Resolution Professional on 26.01.2023, confirming that the CoC consisted solely of State Bank of India with a claim of ₹14,62,18,009.83/- and 100% voting share.

iv. On commencement of CIRP, the Applicant attempted to take charge of the assets and books of account of the Corporate Debtor. An email was sent to the Suspended Directors on 06.01.2023 intimating them regarding the Commencement of the CIRP and further requesting necessary documents and information.

v. On 07.01.2023, the Resolution Professional contacted one of the Suspended Directors, Mr. Naresh Chander Varshney, telephonically. The RP informed him about the initiation of the CIRP and requested that he share contact details of the other directors and assist in providing documents and company information. However, Mr. Varshney conveyed his inability to meet or provide the requested information.

vi. Upon receipt of any reply from the Suspended Director to the E-mail dated 06.01.2023, the Applicant made follow-ups by way of various reminder emails dated 16.01.2023 and 17.01.2023 to furnish the requisite information, to no avail, which compelled the Applicant to file an application under Section 19(2) of the Code, bearing IA No. 1083 of 2023, which was listed before this Adjudicating Authority on 21.02.2023, and notices were issued to all Suspended Directors. Despite service of notice to the Suspended Director, they have failed to either file a reply or appear before this Adjudicating Authority. 

vii. As there was no meaningful cooperation from the Suspended Boardof Directors and no timely response to repeated emails and calls, the Applicant physically visited the registered office of the Corporate Debtor, situated at 1102-A, Pearls Business Park Netaji Subhash Place, Pitampura, North West Delhi, New Delhi – 110034, for the purpose of verifying whether the Corporate Debtor was carrying on business operations from the said address, and to take control of its physical assets and records.

viii. Upon such visit, it was found that the said office was sealed by the Enforcement Directorate and was not in operation. No person was available at the site, and no records or documents of the Corporate Debtor could be obtained.

ix. The Applicant submitted that currently, no physical assets of the Corporate Debtor are available. It was further submitted that the last available financial statements on record pertain to the financial year 2015–2016. The Applicant also submitted that the land and building situated at B-87, Sector-64, Noida, belonging to the Corporate Debtor, were sold by the State Bank of India under the SARFAESI Act around December 2019.

x. The first meeting of the Committee of Creditors was convened on 02.02.2023. Notice of the meeting was duly circulated to the sole Financial Creditor, State Bank of India, and to the Suspended Directors. In the said meeting, the sole member of the CoC, State Bank of India, was present; however, none of the Suspended Directors attended. The CoC noted the constitution of the Committee of Creditors and the non-cooperation by the Suspended Directors. It was further recorded by the CoC that no assets or operations existed in the Corporate Debtor and that it would be appropriate if the Corporate Debtor could be put into liquidation.

xi. The second meeting of the Committee of Creditors was convened on 28.02.2023. Notice of the meeting was duly circulated to the State Bank of India, being the sole member of the CoC, as well as to the Suspended Directors. A representative of the State Bank of India attended the meeting; however, none of the Suspended Directors were present. In the said meeting, the CoC noted the filing of the application under Section 19(2) of the Code and the appointment of valuers.

xii. The third meeting of the Coc was held on 19.06.2023, attended solely by the representative of the State Bank of India (SBI), the only CoC member. Suspended Directors and operational creditors were absent. The CoC reviewed updates on claims, valuation, and a pending Section 19(2) application. The key agenda was the consideration of liquidation; however, due to the absence of assets, records, operations, and personnel, and the unfeasibility of liquidation in light of existing CIRP costs and lack of recoverable value, the CoC discussed and unanimously recommended Dissolution of the Corporate Debtor instead of liquidation. Accordingly, the Resolution Professional was authorised to file an application under Section 54 of the IBC for dissolution.

xiii. The Applicant placed reliance on the settled position that, in cases where there are no assets to liquidate and no prospects of revival, the  Adjudicating Authority is empowered to directly dissolve the Corporate Debtor under Section 54 of the Code, without undergoing the liquidation process. In support of this proposition, the Applicant cited the following decisions, where there were no assets, no operational business, and continuation of CIRP or liquidation was deemed economically impractical, the various co-ordinate benches of this Adjudicating Authority, were pleased to dissolve the Corporate Debtor and discharge the Resolution Professional:

• i. MA/238/2018 in CP/187/IB/2018 (NCLT Chennai)

• ii. MA/540/2019 in CP/490/IB/2018 (NCLT Chennai)

• iii. CA/562/2019 in CP/920/ND/2018 (NCLT New Delhi)

• iv. IA/2227/2020 in CP/1148/ND/2019 (NCLT New Delhi)

• v. IA/198/2020 in CP/180/BB/2018 (NCLT Bengaluru)

• vi. IA/949/KB/2022 in CP/835/KB/2018 (NCLT Kolkata)

• vii. IA/134/KOB/2021 in IBA/22/KOB/2020 (NCLT Kochi)

# 3. Pursuant to the order dated 20.08.2024, notice was issued to the Registrar of Companies and the Income Tax Department to file their responses. However, despite service and multiple opportunities, no appearance or reply was filed by either authority, this Adjudicating Authority, vide order dated 25.04.2025, recorded the continued nonappearance and directed that both the Registrar of Companies and the Income Tax Department be proceeded against ex parte.

# 4. Vide order dated 20.08.2024, this Adjudicating Authority, upon being informed by the Learned Counsel for the Resolution Professional that the registered office of the Corporate Debtor was sealed by the Directorate of Enforcement (“ED”) and was not in operation, directed issuance of notice to the Director, Directorate of Enforcement.

# 5. The ED filed their reply to the present Application and has opposed the dissolution of the Corporate Debtor, M/s Shakti Bhog Foods Limited, in view of the ongoing proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) against M/s Shakti Bhog Foods Ltd. (SBFL) and its group entities including M/s Shakti Bhog Snacks Ltd. (SBSL), pursuant to ECIR/DLZO-I/12/2021 dated 31.01.2021. The ED submitted that SBFL defaulted in repaying its loan obligations, and its account was classified as a Non-Performing Asset (NPA) as on 31.03.2015. The total outstanding dues to the consortium of banks stand at approximately ₹3,269.42 crores as on 31.03.2020 after accounting for realizable securities.

# 6. The Ed submitted that M/s Shakti Bhog Snacks Limited is a group company of M/s Shakti Bhog Foods Limited. Investigation revealed that the said company, along with M/s Shakti Bhog Foods Limited, was involved in the activities related to money laundering. M/s Shakti Bhog Snacks Limited was used by M/s Shakti Bhog Foods Limited to rotate its loan funds against bogus invoices. It was submitted that company layered and siphoned off the proceeds of crime received from SBFL and further transferred them to the directors/promoters of SBFL and their relatives.

# 7. It was submitted by the Ed that SBSL is a group company of SBFL wherein Mr. Kewal Krishan Kumar, Mr. Siddharth Kumar, Ms. Sunanda Kumar, and Mr. Bharat Lal Shukla (an employee of SBFL) were acting as directors. Ms. Sunanda Kumar and Mr. Bharat Lal Shukla were made Directors for namesake only. Operations of the firm were controlled and managed by Kewal Krishan Kumar and Siddharth Kumar, since minimum genuine business activities were conducted in this company. The company maintained several bank accounts, bearing A/c No. 911020027670465 with Axis Bank, A/c No. 042305000350 with ICICI Bank, A/c No. 2530 with Indraprastha Bank, A/c Nos. 62010758619, 64004292210, and 63003943976 with State Bank of India, which were used in routing loan funds of SBFL. 

# 8. The ED submitted that SBSL acquired and possessed proceeds of crime to the tune of ₹97.87 crores from six group entities of SBFL, namely M/s Bhawna Portfolio Pvt. Ltd., M/s Divyarth Leasing & Finance Pvt. Ltd., M/s Divyashakti Hospitality Pvt. Ltd., M/s Fruto Freesh Industries Pvt. Ltd., M/s Pearl Agro Food, and M/s Sunanda Polymer, and transferred funds to the tune of ₹127.81 crores to these group entities from FY 2007– 08 to 2014–15 in the guise of investment and sale-purchase. It was submitted that these transactions were reflected in the books of accounts as sale, purchase, and investments and were projected as

untainted revenue of SBFL and its group companies.

# 9. The ED further submitted that SBSL carried out these transactions without any actual movement of goods. The group companies of SBFL involved in these transactions were shell entities, and no genuine business activities were conducted therein. These transactions were carried out to inflate the financials of SBFL so that more credit facilities could be availed from banks. The ED submitted that, therefore, SBSL was involved in the acquisition, possession, and concealment of proceeds of crime. It was submitted that SBSL was knowingly involved in the process and activity connected with the proceeds of crime, including its acquisition, possession, concealment, and projecting the same as untainted. It also assisted SBFL in such activities, thereby committing the offence of money laundering under Section 3 of PMLA, 2002, punishable under Section 4.

# 10. The ED also submitted that the Corporate Debtor, M/s Shakti Bhog Snacks Ltd., has been arrayed as an accused in the 5th Supplementary Prosecution Complaint dated 20.09.2024 before the Hon’ble Special Court, PMLA. The Court has taken cognizance of the complaint and issued summons to all accused, including SBSL. The prosecution under the PMLA is pending before the Ld. Special Court.

# 11. The Ed submitted that during the investigation, the balance in bank account No. 042305000350 (ICICI Bank) in the name of Shakti Bhog Snacks Limited was attached vide Provisional Attachment Order No. 05/2021 dated 25.08.2021. This attachment was confirmed by the Ld. Adjudicating Authority, PMLA, vide its order dated 26.05.2022. The Hon’ble Delhi High Court in Kumar Food Industries Limited v. Union of India, 2022 SCC OnLine Del 729, held that a bank account in which proceeds of crime are received is itself "property" and "records" involved in money laundering under Sections 2(1)(v) and 2(1)(w) of the PMLA.

# 12. The ED submitted that this Adjudicating Authority does not have the jurisdiction to interfere with proceedings under the PMLA, including provisional attachment orders passed by a competent authority under PMLA. Section 41 of the PMLA clearly bars civil courts from entertaining any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority, or the Appellate Tribunal is empowered to determine. No injunction can be granted by any court or authority in respect of any action taken under the PML Act.

# 13. The ED submitted that the consistent judicial position is that the NCLT and NCLAT lack jurisdiction to adjudicate upon or interfere with actions taken under the Prevention of Money Laundering Act (PMLA), including provisional attachment orders passed by the Enforcement Directorate. This has been unequivocally laid down by the Hon’ble Supreme Court in Embassy Property and Kalyani Transco, and reiterated by the NCLAT and various NCLT benches in decisions such as Kiran Shah, Ashok Kumar Sarawagi, Shimping Technology, Manohar Lal Vij, and Andhra Bank v. Sterling Biotech. The proper forum to challenge such actions lies within the statutory mechanisms under the PMLA, not before the NCLT under the Insolvency and Bankruptcy Code.

# 14. The ED further submitted that the PMLA is a special legislation enacted to combat and regulate the offence of money laundering, and as such, holds primacy over the Insolvency and Bankruptcy Code, 2016 in all proceedings that relate to or arise from acts of money laundering. It is emphasized that the mere initiation of resolution proceedings under the IBC cannot serve as a shield against enforcement actions under the PMLA, as such a proposition would defeat the very object of the statute and allow economic offenders to misuse the insolvency process. The Ed submitted that the Hon’ble Delhi High Court in Deputy Director, Directorate of Enforcement v. Axis Bank (2019 SCC OnLine Del 7854) has clearly held that the IBC and PMLA operate in distinct legal fields, and the former cannot override or nullify proceedings under the latter. The Hon’ble Supreme Court has further recognized economic offences as a distinct category requiring stringent measures and has upheld the special character and overriding nature of the PMLA in cases such as Y.S. Jagan Mohan Reddy v. CBI [(2013) 7 SCC 439], Gautam Kundu v. Directorate of Enforcement [(2015) 16 SCC 1], and P. Chidambaram v. Directorate of Enforcement [(2019) 9 SCC 24]. The Ed submitted that, accordingly, any conflict between the two statutes must be resolved in favour of the PMLA, which is a self-contained code with its own adjudicatory mechanisms and remedies.

# 15. The Applicant pursuant to the reply filed by the ED, submitted that it was granted liberty vide order dated 22.01.2025 to bring on record the 5th Supplementary Prosecution Complaint under Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (PMLA), as filed by the ED in prosecution proceedings against the parent/holding company, M/s Shakti Bhog Foods Limited and its promoters.

# 16. In compliance thereof, the Applicant has brought on record the said Supplementary Prosecution Complaint along with an Affidavit. The Applicant submitted that in the said complaint the Corporate Debtor has been impleaded as an accused only on 20.09.2024 i.e., after a period of 19 months and 18 days from the commencement of CIRP on 03.01.2023.

# 17. The Applicant submitted that the reference to the Corporate Debtor in the said complaint is confined only to pages 20–21. Further, from pages 91–92 of the complaint, the details of provisionally attached properties are enumerated, none of which pertain to the Corporate Debtor.

# 18. The Applicant submitted that at page 93 of the 5th Supplementary Prosecution Complaint, it is merely alleged that the Corporate Debtor routed Rs. 97.87 Crores to six entities from the loan funds of its parent company, Shakti Bhog Foods Limited, which along with its Directors (also Promoter Directors of the CD) is already facing PMLA proceedings. However, since no properties of the Corporate Debtor are involved in the  ED proceedings, and the liability, if any, lies with the said individuals, the pendency of such criminal proceedings cannot be a ground to stall the ongoing IBC process.

# 19. The Applicant further submitted that no substantive property of the Corporate Debtor is under attachment in the said proceedings. The only item attributed to the Corporate Debtor is an ICICI Bank account reflected at Serial No. 29 of the ED’s chart (at page 171 of the ED’s reply), having a meagre balance of Rs. 3701.81/-. It is submitted by the Applicant that the ED is well within its rights to recover such amount, but it is submitted that the pendency of proceedings for such an inconsequential figure cannot be a valid basis to delay the IBC proceedings.

# 20. The Applicant submitted that, before the Ld. Special Judge (PC Act), CBI- 12, Rouse Avenue Courts, New Delhi, in Complaint Case No. 20/2021 (ED vs. Kewal Krishan Kumar & Ors.), the ED itself stated that it had no bjection to the release of properties attached in respect of the parent  company which was duly recorded in order dated 23.04.2025.

# 21. The Applicant further submitted that, the Ld. Trial Court, vide order dated 04.06.2025, has allowed the application of the RP/Liquidator of M/s Shakti Bhog Foods Limited for restoration of attached properties and directed the ED to hand over the assets to the RP/Liquidator. The Applicant submitted that if the ED has not objected to release of properties of the parent company, there remains no rationale to keep the Corporate Debtor’s proceedings stalled for a meagre amount of Rs. 3701.81/- lying in a bank account, particularly when no other asset is involved.

FINDINGS AND ANALYSIS:

# 22. We have heard the Ld. Counsel appearing on behalf of the Resolution Professional and the Ld. Counsel appearing on behalf of the Enforcement Directorate.

# 23. The present Application has been filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking dissolution of the Corporate Debtor, M/s Shakti Bhog Snacks Limited (“SBSL”), on the ground that there are no assets, no ongoing business operations, and no scope for revival. The Resolution Professional submits that continuation of the Corporate Insolvency Resolution Process (CIRP) or initiation of liquidation would be futile and economically unviable. The Committee of Creditors (CoC), consisting solely of the State Bank of India, has unanimously recommended dissolution under Section 54 of the Code.

# 24. Notice was issued to the Registrar of Companies, the Income Tax Department, and the Directorate of Enforcement (“ED”) in light of the disclosure that the registered office of the Corporate Debtor was sealed by the ED. While the RoC and ITD failed to respond, the ED entered appearance and has filed a detailed reply opposing the dissolution. It is the consistent stand of the ED that the Corporate Debtor is directly implicated in a large-scale money laundering investigation initiated against its parent company, M/s Shakti Bhog Foods Limited, and other group entities. The ED has placed on record the 5th Supplementary Prosecution Complaint dated 20.09.2024 wherein the Corporate Debtor stands arraigned as an accused, and one of its bank accounts has been attached under the Prevention of Money Laundering Act, 2002 (“PMLA”), with confirmation by the Adjudicating Authority under PMLA.

# 25. In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law. Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity. Such a consequence would inevitably frustrate the ongoing criminal prosecution under the PMLA and defeat the authority and jurisdiction of the Ld. Special Court, which is statutorily vested with the power to try offences under the PMLA and adjudicate upon related attachments and confiscation proceedings.

# 26. It is well established that the PMLA is a special and self-contained legislation designed to prevent, detect, and punish acts of money laundering. It provides for its own adjudicatory framework and overrides any inconsistent provisions of other laws by virtue of Section 71 of the PMLA. The Hon’ble Supreme Court, in Embassy Property Developments Pvt. Ltd. v. State of Karnataka and Kiran Shah v. Enforcement Directorate, as well as the Hon’ble NCLAT in Sterling Biotech, Manohar Lal Vij, and other matters, has clearly held that the National Company Law Tribunal ("NCLT") and the National Company Law Appellate Tribunal ("NCLAT") do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution.

# 27. In view of the foregoing, we are of the considered opinion that permitting dissolution despite the pendency of the Special Court’s cognizance over the Corporate Debtor would amount to judicial overreach and would impair the ED’s ability to complete its investigation, pursue trial, and recover proceeds of crime. This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative. The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code.

ORDER:

# 28. In light of the above facts and circumstances, the prayer(s) sought in the present Application cannot be allowed and hence, IA-3695-2023 In IB-1713-2019, hereby stands dismissed.

# 29. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities. No order as to costs.

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Janak Jagjivan Shah RP Vs. Committee of Creditors, Rainbow Infrabuild Pvt. Ltd. - The RP may send intimation to Registrar of Companies, giving the facts and details, praying that Company’s name be struck off from the Register of Companies The CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by the RP. The CIRP proceedings may be treated to be closed.

 NCLAT (2024.10.28) in Janak Jagjivan Shah RP Vs. Committee of Creditors, Rainbow Infrabuild Pvt. Ltd. [Company Appeal (AT) (Insolvency) No.1406 of 2024] held that;

• The RP may send intimation to Registrar of Companies, giving the facts and details, praying that Company’s name be struck off from the Register of Companies

• The CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by the RP. The CIRP proceedings may be treated to be closed.

Excerpts of the Order;

This Appeal by the Resolution Professional (“RP”) of Infrabuild Pvt. Ltd. has been filed challenging order dated 11.06.2024 passed by National Company Law Tribunal, Division Bench-I, Ahmedabad in IA (Dis)/14(AHM) 2024 in CP(IB)/71(AHM) 2023. By the impugned order, the Adjudicating Authority has rejected IA No.14 of 2024 filed by the RP praying for dissolution of the Corporate Debtor (“CD”). Aggrieved by which order, this Appeal has been filed.

# 2. Brief facts necessary to be noticed for deciding the Appeal are:

(i) On an Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) by AVB Global Ventures Pvt. Ltd., claiming dues of Rs.2,38,95,357/- the Adjudicating Authority passed an order on 09.11.2023 admitting Section 7 Application and appointing Janak Jagjivan Shah as the Interim Resolution Professional (“IRP”). Public announcement was made by the IRP on 11.11.2023, in pursuance of which, one claim was submitted by Financial Creditor – AVB Global Ventures Pvt. Ltd. claiming an amount of Rs. Rs.2,38,95,357/-, which was admitted by the IRP. The IRP constituted the CoC, consisting of AVB Global Ventures Pvt. Ltd. as 100% Member of the Committee of Creditors (“CoC”). The Report of the constitution of CoC was submitted on 30.11.2023.

(ii) Income Tax Department also filed its claim vide letter dated 28.11.2023 in Form-B. However, the total amount of claim was mentioned in Form-B as ‘NIL’.

(iii) The first Meeting of the CoC was held on 08.12.2023. The CoC noticed the claims received from the Financial Creditors. The Suspended Director of the Corporate Debtor was also present in the Meeting. The IRP was approved as RP. RP was permitted to incur expenses for the valuation of the assets of the Corporate Debtor. The Valuation Report was submitted reporting that cash nd bank balance of the CD is only Rs.1,535/-. No other assets

were noted or valued. 

(iv) The second CoC Meeting was held on 06.01.2024, where a decision was taken to invite Expression of Interest (“EoI”) and further not to conduct a transaction/ forensic audit of the Company. The publication of Form-G was approved. The Information Memorandum was also published attaching the financial statements for Financial Years 2021-22 and 2022-23. Cash balance was mentioned as Rs.84 and total cash and cash equivalents was mentioned as Rs.1,451/-

(v) The third Meeting of the CoC was held on 06.02.2024, where it was noted that Form-G did not fetch any EoI. However, it was decided to take one more effort for fetching EoI. Form-G was published again and no EoI was received. It was noted that even after second publication of Form-G, no EoI was received.

(vi) Fifth CoC Meeting was held on 29.04.2024. The RP informed the CoC that since permitted period of CIRP is going to over on 06.05.2024 and no EoI has been received, liquidation process should be initiated. The CoC resolved not to initiate liquidation process and decided to file an application for dissolution of the CD.

(vii) In pursuance of the resolution passed by the CoC in its fifth Meeting dated 29.04.2024, an IA was filed by the RP being IA (Dis)/14(AHM)/2024, which came to be rejected by the Adjudicating Authority. The Adjudicating Authority took the view that Application under Section 54 for dissolution of the Corporate Debtor can be filed only when assets of the Corporate Debtor are liquidated. The Adjudicating Authority has also referred to the provisions of IBBI (Liquidation Process) Regulations, 2016 (hereinafter referred to “Liquidation Regulations”) Regulation 14 and Section 54 of the IBC and opined that in exercise of power conferred under Section 54 of the IBC, the Adjudicating Authority is not inclined to order dissolution of the CD. Consequently, the Application was rejected. Aggrieved by the order passed by Adjudicating Authority dated 11.06.2024, this Appeal has been filed.”

# 3. We have heard Shri Dheeraj Garg, learned Counsel appearing for the Appellant and Shri Pratik Thakkar, learned Counsel appearing for the CoC. 

# 4. Learned Counsel for the Appellant in support of the Appeal contends that the CD having no assets and no business for last 2-3 years and the total bank balance of the CD being only Rs.1,451/- and the liquidation value of the CD being only Rs.1,535/-, CoC decided not to take steps for liquidation of the CD. The CoC decided not to bear any expenses on liquidation, hence, the dissolution of CD was approved. It is submitted that Form-G was twice published under the decision of the CoC and no EoI was received. The CoC rejected the resolution to initiate the liquidation and with 100% majority approved the resolution for direct dissolution. The learned Counsel for the Appellant in support of his submission relied on judgment of NCLAT Chennai Bench in the matter of Shyson Thomas vs. Mr. Madhugiri Venkatarayappa Sudarshan (TA (AT) No.8 of 2021 in CA(AT) (CH) (Ins.) No.925/2020) and submitted that the Adjudicating Authority committed error in rejecting Application for dissolution filed by the RP under the resolution of the CoC. It is submitted that when CoC is not ready to bear the liquidation cost and the CD has no assets to be liquidated, filing of liquidation application will further burden the CoC. It is submitted that observation of the Adjudicating Authority in the impugned order ‘the cash and cash equivalent as on that date were Rs.1,44,880/- …’, which is the amount contributed by the CoC for meeting the CIRP cost and the reliance on the said amount was wholly incorrect. It is  submitted that in the special facts and circumstance of present case, dissolution was only option left and the Adjudicating Authority committed error in rejecting the Application.

# 5. The learned Counsel for the CoC has also supported the submissions of the Appellant. It is submitted that CoC, who resolved to file application for dissolution instead of a liquidation, since neither the CD has the assets, nor there are any amount available to bear the cost of liquidation. 

# 6. We have considered the submission of learned Counsel for the parties and have perused the records.

# 7. We have already noticed the above that the valuers were appointed by the RP in pursuance of the resolution of the CoC. Valuation of the CD was reported as Rs.1,535/-, which was cash and bank balance as on the CIRP commencement date, which have been found by Adjudicating Authority in paragraph 16(f). As noted above, the CoC decided twice to issue Form-G and Form-G was issued twice, but no EoI was received from anyone. M/s. AVB Global Ventures Pvt. Ltd. was the Financial Creditor who initiated proceedings under Section 7 and the claim of AVB Global Ventures Pvt. Ltd. was accepted and admitted in the CIRP to the extent of Rs.2,57,12,668/-. The Financial Creditor was the sole CoC Member with 100% vote share. In the fifth CoC Meeting held on 29.04.2024, the discussion on the initiation of liquidation was taken at Agenda Item No. Discussion on Agenda Item No.4 is as follows:

• “4) TO DISCUSS ON THE INITIATION OF LIQUIDATION AND APPOINTMENT OF LIQUIDATOR PURSUANT TO THE SECTION 33 & 34 OF INSOLVENCY AND BANKRUPTCY CODE. 2016

• The RP informed the COC that since the permitted period of CIRP is going to be over shortly i.e. on 06-05-2024 and no expression of interest has been received therefore liquidation process should be initiated and appointment of the liquidator should be made and proposed himself to be the liquidator. The members of the COC informed the RP that since there is no assets with CD and no expression of interest was received lnspite of publication of form G for invitation of expression of interest twice, the COC is of the opinion that the CD should be dissolved instead of initiation of liquidation process. The member further stated that the CD has very small Authorised capital of Rs. 1 lac and as informed by the RP that carried forward loss of about Rs.31,500/- only therefore there is no contingent assets also. on the contrary if anybody take over the CD as going concern or otherwise huge income tax liabilities will arise due to written back of the creditors of more than 630 lacs due to amendment in income tax law with effect from AY 2023-24 however in earlier years the written off of loan given kind of liability was not allowable as was in the case of the CD as the entire loss in p&l a/c is related to written of off such kind of liability. After discussion the following resolution was put to vote:-

• "RESOLVED THAT THE CORPORATE DEBTOR BE LIQUIDATED AND AN APPLICATION IN THIS REGARDS SHOULD BE MADE BEFORE THE ADJUDICATING AUTHORITY FOR APPROPRIATE ORDER AND JANAK SHAH BE APPOINTED AS A LIQUIDATOR OF THE CD TO CARRY OUT LIQUIDATION PROCESS."

The member of the COC voted against the above resolution therefore the above resolution is not passed.”

# 8. Under Agenda Item No.5 discussion regarding Regulation 39B, 39BA, 39C and 39D of IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016 was taken, where it was resolved that Corporate Debtor be dissolved and application in this regard be made before the Adjudicating Authority. The Minutes regarding dissolution at Agenda Item No.5 is as follows:

• “5) TO DISCUSS REGARDING THE REGULATION 398. 39BA. 39C & 39D OF INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS. 2016:-

• The RP informed the COC that in the facts of the case of the CD requisite resolutions as per regulations 39B, 39BA, 39C & 39D regarding estimation of liquidation cost, the arrangement for meeting of the said liquidation cost, assessment of compromise or arrangement or assessment of sale as a going concern, fixing the fee of liquidator etc. are required to be consider by the COC and vote in this regard. The members of the COC informed the RP that since there is no assets with CD and no expression of interest was received inspite of publication of form G for invitation of expression of interest twice, the COC is of the opinion that the CD should be dissolved instead of initiation of liquidation process. 

• The member of the COC further state that they are against the passing of the resolutions under regulations 39B, 39BA, 39C & 39D. The member of COC informed that they are in favour of passing the resolution for the dissolution of CD therefore appropriate resolution should be put for vote of the COC. The RP put the following resolution for vote of the COC: -

• "RESOLVED THAT THE CORPORATE DEBTOR RAINBOW INFRABUILD PRIVATE LIMITED BE DISSOLVED AND AN APPROPRIATE APPLICATION IN THIS REGARDS BE MADE BEFORE THE ADJUDICATING AUTHORJTY FOR THE ORDER OF DISOLUTION OF THE CORPORATE DEBTOR"

# 9. It was on the basis of the resolution of the CoC in fifth Meeting, application was filed before the Adjudicating Authority for dissolution of the Corporate Debtor. We now need to notice the relevant provisions under the IBC for dissolution. Section 54 of the IBC provides for dissolution of the Corporate Debtor, which is as follows:

• “54. Dissolution of corporate debtor. - (1) Where the assets of the corporate debtor have been completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the dissolution of such corporate debtor.

• (2) The Adjudicating Authority shall on application filed by the liquidator under sub-section (1) order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly.

• (3) A copy of an order under sub-section (2) shall within seven days from the date of such order, be forwarded to the authority with which the corporate debtor is registered.”

# 10. The Adjudicating Authority has referred to Regulation 14 of the IBBI (Liquidation Process) Regulations, 2016, which deals with early dissolution. Regulation 14 is as follows:

• “14. Early dissolution. Any time after the preparation of the Preliminary Report, if it appears to the liquidator that-

• (a) the realizable properties of the corporate debtor are insufficient to cover the cost of the liquidation process; and 

• (b) the affairs of the corporate debtor do not require any further investigation;

• he shall consult the consultation committee and if it advises for early dissolution, he may apply, along with a detailed report incorporating the views of the consultation committee, to the Adjudicating Authority]for early dissolution of the corporate debtor and for necessary directions in respect of such dissolution.”

# 11. The Adjudicating Authority in the impugned order in paragraph 16 of the judgment has made the following observations:

• “16 …

• (c) Upon a comprehensive examination of Regulation 14 of the IBBI (Liquidation Process) Regulations and Section 54 of the Insolvency and Bankruptcy Code, 2016, this Tribunal observes that "only the Liquidator" is empowered to make an application to the Adjudicating Authority for the dissolution of a Corporate Debtor. As the liquidation process has not yet commenced in this matter, there is no specific provision that authorizes an early dissolution prior to the initiation of liquidation.

• d) It has been observed that the Applicant, in his capacity as the Resolution Professional, has submitted a compliance certificate under Form-H in accordance with Regulation 45(3) of the IBBI (Liquidation Process) Regulations. Additionally, the Applicant has designated himself as the Liquidator under Annexure-S of this application. However, it is pertinent to note that no order for liquidation has been passed by this Tribunal to date. Consequently, there is no Liquidator or any authorized person in the capacity of the Liquidator who can file the said compliance certificate. 

• e) It is seen that the applicant has not filed the copy of Transaction Audit Report along with its application and no averment has been made in this regard by the applicant.

• f) Applicant has attached the valuation report by two valuers, both of whom have given the valuation of Rs. 1535/- being cash and bank balance as on the CIRP commencement date and no value has been ascribed to any other current asset/fixed asset of the Corporate Debtor. Applicant has attached the audited financials of the Corporate Debtor as on 31.03.2023 and at page 191 of the application, is the audited balance sheet as on 31.03.2024. Perusal of the same reveals that the cash and cash equivalents as on that date were Rs. 1,44,880 I- which are much more than the liquidation value ascribed by the two valuers.”

# 12. The application was rejected and RP was directed to carry out transaction audit from 01.04.2020 to the date of commencement of the CIRP, which order is under challenge in this Appeal.

# 13. We may first notice the direction of Adjudicating Authority for transaction audit report as contained in paragraph 18 of the order, which direction is as follows:

• “18. In light of the observations noted in paragraphs 16(e) and 16(f), the applicant is hereby directed to carry out transaction audit from 01.04.2020 to the date of commencement of the CIRP.”

# 14. The CoC in its second Meeting had already taken the decision not to conduct the transaction/ forensic audit of the Company. At Agenda Item No.6, following was resolved:

• “6) To conduct the Transaction/Forensic Audit of the Company; The Resolution Professional. informed that the company is not conducting/continuing the business from last 4-5 years Thus, it was decided that conducting a transaction/forensic audit may not be useful. This stance is based on the prescribed look-back period of 1·2 years from the commencement of Corporate Insolvency Resolution Process (CIRP) as specified in the provisions of the Insolvency and Bankruptcy Code (IBC) of2016.”

# 15. In the CoC Meeting, it was noted that CIRP is coming to an end in May 2024, the CIRP having already come to an end on 06.05.2024, there being no prayer for extension of CIRP period, we fail to see any reason for direction of transaction audit as directed by the Adjudicating Authority. The liquidation value of the CD was already obtained, which was Rs.1,535/- only. There was no cash or cash balance except of a meagre amount of Rs.1,451/- no other assets were found and CIRP having come to an end, direction by the Adjudicating Authority dated 11.06.2024 for transaction audit is unsustainable and is set aside.

# 16. Now we come to the application filed by the Appellant praying for dissolution of the CD, which has been rejected by the impugned order. The Adjudicating Authority in the impugned order has referred to Section 54 of the IBC, which contemplate making an application to the Adjudicating Authority for the dissolution, where the assets of the Corporate Debtor have been completely liquidated. In the present case, the Adjudicating Authority has neither directed for any liquidation, nor liquidation has actually been conducted.

# 17. The learned Counsel for the Appellant has placed reliance on the judgment of this Tribunal, Chennai Bench in Shyson Thomas (supra), which was a case where Promoter/ Director of the CD had filed the Appeal challenging the order of the Tribunal dated 24.06.2020, by which order Adjudicating Authority had allowed dissolution of the CD. In paragraph 2 of the order, this Tribunal has noted paragraphs 5 and 6 of the order of the Adjudicating Authority, which is as follows:

• “2. The `Adjudicating Authority’ (`National Company Law Tribunal’, Bengaluru Bench), while passing the `impugned order’ in IA No. 198 of 2020 in CP (IB) No. 180 / BB / 2018, at Paragraph Nos. 5 & 6, had observed the following:

• 5. ``In terms of Section 60 of Code, the Adjudicating Authority shall be NCLT having territorial jurisdiction over the place, where the registered office of Corporate Persons is located. By conjointly reading the above provisions, the ultimate objective of Code is either to resolve the issue by way of Resolution Plan or to dissolve the Corporate Debtor, as expeditiously as possible. If the facts and circumstances of a case, justify there would not serve any purpose to keep the Corporate Debtor under regular CIRP proceedings, and thereafter under Liquidation proceedings, under the provisions of Code, the Adjudicating Authority, by exercising its inherent powers conferred under the Code, can pass appropriate order(s) in the interest of speedy justice. 

• 6. The above facts and circumstances of the Case fully justified, that there would be no useful purpose be served, by placing the Corporate Debtor under Liquidation process, under the extant provisions of Code. Since no assets exists in the Company, as declared by the Resolution Professional, the liquidation process under the provisions of Code, is deemed to have completed under Chapter III of Part II of Code, and thus it would just and proper for the Adjudicating Authority to dissolve the Company as prayed by the Resolution Professional. The instant Application is filed in accordance with law and the Resolution to dissolve the Corporate Debtor was approved by the Sole COC, as detailed supra.’’”

# 18. The Promoter/ Director had challenged the order on the ground that they had already obtained No Objection Certificate from the Ministry of Civil Aviation Sector and there has been sufficient infrastructure to support the Corporate Debtor. This Tribunal after considering the submissions of the parties, upheld the order of the Adjudicating Authority, relying on inherent power of the Adjudicating Authority to direct for dissolution in the facts of the said case. The submission, which was advanced by the RP before this  Tribunal was that commercial wisdom of the CoC need no interference and the Adjudicating Authority in exercise of inherent jurisdiction can dissolve the CD in the facts of the case. In the present case, the Adjudicating Authority has not exercised its jurisdiction in allowing the application filed by the CD for dissolution referring to Section 54 of the IBC and Regulation 14 of the Liquidation Regulations. The scheme of the IBC clearly provides that dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. In the present case, the liquidation proceedings have not been undertaken and resorting to Section 54 could not have been taken as per the scheme of the IBC. The facts of the present case indicate that CIRP has been completed without any Plan having been received, inspite of Form- G published twice. The Adjudicating Authority did not pass any order for liquidation, which could have been passed under Section 33, sub-section (1). Thus, the CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54, could not have been taken by the RP. 

# 19. Under the Companies Act, Chapter XVIII, containing the heading “Removal of names of companies from the Register of Companies”, provides ample jurisdiction to Registrar of Companies to remove the name of a Company from Register of Companies. Section 240 empowers the Registrar, who on being satisfied by reasonable cause as mentioned in sub-clause (1) or as is covered by sub-clauses (c), (d) and (e), Registrar can strike off the name of the Company from the Register of Companies. In the present case, the RP  could have intimated the Registrar of Companies for striking off the name of the Company. In the facts of the present case, where company is not carrying on any business and there are no assets of the Company, dissolution of the Company under Section 54, is a step, which could have been taken as per the statutory scheme of the IBC. This Tribunal’s judgment in Shyson Thomas was a case where Adjudicating Authority exercising its jurisdiction has directed for dissolution by allowing the application. In the present case, the Adjudicating Authority had rejected the application, relying on the provisions of Section 54 of the IBC and Regulations 14 of the Liquidation Regulations. 

# 20. We have noted above that CoC has decided not to make any contribution towards the liquidation process and liquidation, hence, was not directed. In the present case, CoC consisted of sole Financial Creditor, who had initiated the CIRP against the CD. When the entity, who has initiated the CIRP is not ready to proceed any further and CIRP period having already come to an end, no further steps were required in the CIRP of the Corporate Debtor and RP could have closed the matter by intimating the Registrar of Companies for striking off the name of Company from the Register of the Companies. 

# 21. In view of our foregoing discussions and conclusions, we dispose of this Appeal with following direction:

• (I) The impugned order dated 11.06.2024 directing for carrying out transaction audit, is set aside.

• (II) The RP may send intimation to Registrar of Companies, giving the facts and details, praying that Company’s name be struck off from the Register of Companies

• (III) The CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by the RP. The CIRP proceedings may be treated to be closed.

Parties shall bear their own costs.

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