NCLT Orders Dissolution as All Assets Were Liquidated & Distributed Under Section 53

Navin Khandelwal Vs HDFC Bank Ltd & Ors (NCLT Indore)

Summary: In Navin Khandelwal Vs HDFC Bank Ltd & Ors, the NCLT Indore Bench considered an application filed by the Liquidator under Section 54 of the Insolvency and Bankruptcy Code, 2016 seeking dissolution of Oxygen Lifeline Retail Private Limited after completion of liquidation proceedings.

The Corporate Debtor was admitted into CIRP on 7 October 2021 and later ordered into liquidation on 22 September 2022. The Liquidator conducted the liquidation process in accordance with the IBC and Liquidation Process Regulations. Public announcement inviting claims was issued on 3 October 2022, claims were verified, and the Stakeholders Consultation Committee (SCC) was constituted on 26 November 2022. Admitted claims included HDFC Bank as secured financial creditor with admitted dues of Rs. 7.45 crore and operational creditors with admitted claims of Rs. 3.67 crore.

The Corporate Debtor possessed two movable assets, namely an Audi A6 and a Tata Hexa XT. Registered valuers were appointed and both vehicles were sold through e-auction during June 2023. The total liquidation value of the assets was Rs. 29.20 lakh and the realised amount was Rs. 28.77 lakh. The sale proceeds were deposited into the liquidation account and distributed in accordance with Section 53 of the IBC.

Seven SCC meetings were held during the liquidation process. In the 7th SCC meeting held on 8 August 2023, the stakeholders resolved with 66.97% voting share to conclude the liquidation process and authorised the Liquidator to file the dissolution application. The liquidation process was completed within the statutory period of one year and no extension was sought. Quarterly progress reports, revised Form H, audited receipts and payment statements, and the bank closure certificate confirming NIL balance were filed before the Tribunal.

The audited receipts and payments statement showed total realisations of Rs. 30.40 lakh including sale proceeds and refundable EMD receipts. Payments included liquidation costs, liquidator’s fees, CIRP expenses, and distributions to HDFC Bank under Section 53. HDFC Bank received Rs. 18.10 lakh against admitted claims of Rs. 7.45 crore. The Income Tax Department had an outstanding demand of Rs. 8.11 lakh for AY 2019-20, but no distribution was made due to exhaustion of the liquidation estate.

The Tribunal observed that all assets of the Corporate Debtor had been liquidated, there were no remaining movable or immovable assets, no pending avoidance transactions or litigation, and all statutory compliances under Section 54 and Regulation 45 had been fulfilled. It also noted that the liquidation account had been closed and the entire realisation had been distributed in accordance with Section 53 of the Code.

While taking note of the outstanding Income Tax demand, the Tribunal held that since the liquidation estate had already been fully distributed and no assets remained, the tax dues would not impede dissolution. Accordingly, the NCLT allowed the application and ordered dissolution of Oxygen Lifeline Retail Private Limited under Section 54 of the IBC from the date of the order. The Registry was directed to send copies of the order to the Registrar of Companies, Gwalior and the IBBI within seven days.

FULL TEXT OF THE NCLT JUDGMENT/ORDER

The case is fixed for pronouncement of the order.

The order is pronounced in open Court vide separate sheet.

1. IA No. 321 of 2023 is an application for dissolution of the Corporate Debtor M/s Oxygen Lifeline Retail Private Limited (CD) filed by the Liquidator, Mr. Navin Khandelwal, under Section 54 of the Insolvency and Bankruptcy Code, 2016 (IBC/Code) read with Regulation 45 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations). The prayers sought in the Application are as follows:

a. Allow dissolution of the Corporate Debtor under Section 54(2), IBC, 2016;

b. Pass such other or further order(s) as may be deemed fit and proper in the facts and circumstances of the instant case.

Brief facts of the case as stated in the application:

As submitted by the parties in the pleadings and submissions made in the court, the following are the relevant facts of the case:

2. M/s Oxygen Lifeline Retail Private Limited (CIN: U52601MP2017PTC044064), the Corporate Debtor, was incorporated on 01.09.2017 and is registered with the Registrar of Companies, Gwalior. The CD was admitted into Corporate Insolvency Resolution Process (CIRP) by this Adjudicating Authority in C.P.(IB)/12(MP)/2021 vide order dated 07.10.2021. Subsequently, the CD was admitted into liquidation under Section 33 of the Code vide order dated 22.09.2022 (date of order received: 30.09.2022). Mr. Navin Khandelwal (IBBI Registration No. IBBI/IPA-001/IP-P00703/2017-2018/11301) was appointed as the Liquidator.

3. Pursuant to the Liquidation order, the Applicant/Liquidator carried out the liquidation process of the CD in compliance with the Code and Regulations.

4. In compliance with Regulation 12(1) of the Liquidation Process Regulations, the Liquidator made a Public Announcement in FORM-B dated 03.10.2022 for submission of claims. The Liquidator also intimated the Information Utility on 03.10.2022 about the commencement of the liquidation proceedings.

5. The claims received from the creditors were collated and verified by the Liquidator. In compliance with Regulation 31A of the Liquidation Process Regulations, the Stakeholders Consultation Committee (SCC) was constituted on 26.11.2022. The list of stakeholders was submitted to the Adjudicating Authority on 12.12.2022. The details of the claim of the creditors admitted are as follows:

6. In compliance with Regulation 35(2) of the Liquidation Process Regulations, registered valuers were appointed on 02.03.2023 for carrying out the valuation of the assets of the CD. The details of the assets are as follows:

7. The Liquidator published public e-auction notices on 31.03.2023 (Round 1) and 13.05.2023 (Round 2) for the disposal of the assets of the CD. Pursuant to the said notices, the two motor vehicles — Audi A6 and Tata Hexa XT — were successfully auctioned on 08.06.2023 and the sale proceeds were deposited into the liquidation account.

8. The Liquidator convened 7 SCC meetings during the liquidation process of the Corporate Debtor. In the said meetings, the stakeholders were duly apprised regarding the progress of the liquidation process, and all issues pertaining to the same were duly deliberated and discussed. The 7th SCC meeting held on 08.08.2023 resolved that the liquidation process be concluded and that an application for dissolution of the Corporate Debtor be filed before this Adjudicating Authority. The said resolution was passed with requisite majority of 66.97%.

9. In the 7th SCC meeting held on 08.08.2023, the SCC resolved to authorise the Liquidator to file an application for dissolution of the Corporate Debtor. Accordingly, the present application IA No. 321 of 2023 was filed for the dissolution of the CD.

Details relevant for considering the dissolution application of the CD:

10. The Liquidation period commenced on 22.09.2022. As per Regulation 44 of the Liquidation Process Regulations, the liquidation shall be completed within 1 year. The present dissolution application has been filed before the expiry of the period of one year from the commencement of liquidation and no extension of the liquidation period has been sought by the Liquidator.

11. In compliance with Regulation 15(1)(a) of the Liquidation Process Regulations, the Liquidator has submitted quarterly progress reports for every quarter post-commencement of liquidation, which were duly filed and taken on record by this Adjudicating Authority. The details are as follows:

12. Pursuant to Regulation 41 of the Liquidation Process Regulations, the Liquidator opened a liquidation bank account with HDFC Bank, Trade House Branch, South Tukoganj, Indore, details of which are as follows:

Account Name: M/s LIQUIDATION OF A/C OXYGEN LIFELINE RETAIL PVT. LTD.

Bank & Branch: HDFC Bank, Trade House Branch, South Tukoganj, Indore – 452 001

Account Number: 50200065170168
IFSC Code: HDFC0000036

13. The Liquidator submits that the above liquidation bank account has been closed after completion of the liquidation process. A Bank Closure Certificate dated 13.02.2026 is annexed to the additional affidavit filed by the Liquidator, confirming closure of the said account. The closing balance of the account as on the date of closure was NIL.

14. In accordance with the Liquidation Process Regulations, the Liquidator maintained a detailed record of all receipts and disbursements during the course of the liquidation. The audited and certified Statement of Receipts and Payments for the period from the date of commencement of liquidation i.e., 22.09.2022 to 05.02.2026, as certified by M/s Anurag Ahuja & Associates, Chartered Accountants, Jabalpur (UDIN: 26433859NGMYQT3825), is as follows:

15. The details of the amount distributed to the stakeholders as per Section 52 or 53 of the Code are as follows:

The Liquidator submits that the entire realisation from the sale of the two vehicles has been distributed to the stakeholders in accordance with Section 53 of the Code. There are no further realisable assets of the CD.

The applicant appraised as per the Form H dated 06.02.2026 that he has realized the sum of Rs. 28,77,253 (Rupees Twenty-Eight Lakhs Seventy-Seven Thousands Two hundred & Fifty-Three Only). The applicant distributed Rs. 28,77,253/- in accordance with Section 53 of Insolvency and Bankruptcy Code, 2016.

The Applicant has submitted the Proof of distribution of amount within 90 days from the receipt of realisation:

6. The details of the asset disposal status as averred in the application are as follows:

i. The Corporate Debtor had two movable assets — an Audi A6 car and a Tata Hexa XT car. Both have been successfully sold through e-auction proceedings conducted on 31.03.2023 and 13.05.2023 respectively, and the sale proceeds deposited into the liquidation account.

ii. The Income Tax Department, through its Senior Standing Counsel, has reported an outstanding demand of Rs. 8,11,480/- for Assessment Year 2019-20 under Section 143(1a) of the Income Tax Act dated 01.05.2020. The Liquidator has intimated the Income Tax Department and GST/VAT authorities on 25.09.2023.

iii. There are no other assets — movable or immovable of the Corporate Debtor remaining to be liquidated. There are no pending avoidance transactions or litigation filed by or against the Corporate Debtor.

17. The Compliance Certificate in Form H, as per Regulation 45(3) of the Liquidation Process Regulations, has been prepared and filed along with the present application (revised Form H dated 06.02.2026). The said compliance certificate, as certified by Mr. Navin Khandelwal, Liquidator, confirms compliance with allmaterial requirements under the Code and Liquidation Process Regulations. The key compliance particulars are as follows:

18. In compliance with the applicable statutory requirements, the Liquidator intimated the following statutory authorities regarding the commencement of the liquidation proceedings:

(a) Income Tax Department — intimated on 25.09.2023

19. On 10.02.2026, this Adjudicating Authority, upon hearing the parties, raised a query regarding the Balance Sheet of the Corporate Debtor and directed the Liquidator to place the same on record. Subsequently, the Liquidator filed an additional affidavit dated 19.02.2026 annexing the Company Master Data, audited Financial Statements for FY 2018-19, valuation reports, copy of the NCLT order dated 05.05.2022 along with related documents from the Office of the Jail Superintendent, District Jail Indore (M.P.), minutes and e-voting results of the 7th SCC meeting held on 08.08.2023, copy of the e-auction notice dated 13.05.2023 along with the auction result, and the Bank Closure Certificate dated 13.02.2026.

20. The Liquidator further filed an affidavit dated 07.02.2026 placing on record a revised Form H dated 06.02.2026 and the audited Receipt and Payment Account for the entire liquidation period from 22.09.2022 till 05.02.2026, along with the bank statement of the liquidation account confirming a NIL closing balance.

21. Respondent No. 1 (HDFC Bank Limited) is a member of the SCC and has not filed any separate reply to the present application. The Learned Counsel for Respondent Nos. 2 and 3 appeared and submitted that they have no objection to the present application filed by the Applicant and do not wish to file any reply. The right of Respondent Nos. 2 and 3 to file a reply was accordingly closed vide order dated 10.02.2026.

22. In view of the above facts and circumstances, it is prayed by the Applicant/Liquidator that the CD may be dissolved under Section 54 of IBC, 2016.

Observation and Analysis:

23. We have gone through the present Application filed by the Liquidator praying for closure of the liquidation process and dissolution of the Corporate Debtor, in terms of Section 54 of the Insolvency and Bankruptcy Code, 2016, read with Regulation 45 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

24. That the Applicant/Liquidator has filed the application along with various documents and reports which were required to be submitted as per the provisions of IBC, 2016, read with the relevant regulations.

25. That the liquidation process was concluded within the stipulated timeline of one year from the commencement of liquidation and no extension of the liquidation period was required to be sought.

26. That the Corporate Debtor had two movable assets — an Audi A6 and a Tata Hexa XT — which have been successfully sold through e-auction proceedings and the entire sale proceeds amounting to Rs. 28,77,254/- have been realised and distributed to the stakeholders in accordance with Section 53 of the Code.

27. That as per the record submitted by the Liquidator, there are no remaining assets of the Corporate Debtor, which can be further liquidated or distributed to the stakeholders. The liquidation bank account has been closed, and the bank closure certificate dated 13.02.2026 has been placed on record.

28. That there are no pending avoidance transactions, litigation, or any other undischarged matters before any Court or Tribunal relating to the Corporate Debtor as on date, as certified by the Liquidator in Form H.

29. That the Compliance Certificate in Form H, as required under Regulation 45(3) of the Liquidation Process Regulations, has been submitted. All compliances under the Code and Liquidation Process Regulations have been duly made.

30. It is relevant to mention Section 54 of the IBC, 2016, and Regulation 45 of the IBBI (Liquidation Process) Regulations, 2016 here:

“Section 54 IBC – 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.”

“IBBI (Liquidation Process) Regulations, 2016

45. Final report prior to dissolution.

1. When the corporate debtor is liquidated, the liquidator shall make an account of the liquidation, showing how it has been conducted and how the corporate debtor’s assets have been liquidated.

2. If the liquidation cost exceeds the estimated liquidation cost provided in the Preliminary Report, the liquidator shall explain the reasons for the same.

(3) The liquidator shall submit an application along with the final report and the compliance certificate in Form H to the Adjudicating Authority for — (a) closure of the liquidation process of the corporate debtor where the corporate debtor is sold as a going concern; or (b) for the dissolution of the corporate debtor, in cases not covered under clause (a).”

31. From the conjunct reading of the above provisions, this Adjudicating Authority is required to see whether the assets of the Corporate Debtor are completely liquidated or not. In the instant case, the Liquidator has furnished his Final Report and Form H to support the same.

32. Since in the instant case, there are no remaining assets of the Corporate Debtor which need to be liquidated, and all the requirements of Section 54 read with Regulation 45 of the IBBI (Liquidation Process) Regulations, 2016 have been fulfilled, we are inclined to allow the present Application under Section 54(2) of the IBC, 2016.

33. We take note of the submission made by the Income Tax Department that an outstanding demand of Rs. 8,11,480/- for AY 2019-20 remains. However, since the liquidation estate has been fully distributed in accordance with the priority prescribed under Section 53 of the Code, and there are no remaining assets, this shall not constitute an impediment to the dissolution of the Corporate Debtor.

34. Thus, we are of the view that there is no impediment to allowing the dissolution of the CD. Therefore, we are inclined to allow the present Application.

Order:

35. The Corporate Debtor, Oxygen Lifeline Retail Private Limited (CIN No. U52601MP2017PTC044064) stands dissolved from the date of this order as per the Section 54 of the Insolvency and Bankruptcy Code, 2016

36. The Registry is directed to send a copy of this order passed under Section 54(2) to the Registrar of Companies, Gwalior (with which the Corporate Debtor is registered), and to the IBBI within seven days from the date of this order.

37. With the above directions IA 321(IND)2023 in CP (IB) 12/NCLT/IND/2021 stands disposed of.