Mohd Sharief Tariq, Member - (1.) The Application has been filed to order winding up of M/s. Tiruppur Surya Hitec Apparels Pvt Limited, which has been under the Corporate Insolvency Resolution Process (CIRP) since 14.06.2017, the period of 180 days expired on 12.12.2017 and an extension has been granted for 30 days vide Order dated 18.12.2017 with effect from 12.12.2017, which is expiring today.
(2.) It is on record that the CIRP has been initiated by the Corporate Debtor (CD) itself under Section 10 of the Insolvency And Bankruptcy Code, 2016 (in short I&B Code, 2016) by filing CP/468/(IB) /2017 and the application was admitted on 14.06.2017 when the commencement of the CIRP has started and the Interim Resolution Professional (IRP) was appointed. Thereafter, the Applicant has been appointed as Resolution Professional (RP) on the recommendation of Committee of Creditors (CoC) vide order dated 20.09.2017 passed by this Authority. The factual detail as recorded by the RP in the Application is as follows:- i. The claims of debt received is Rs. 154.91 Crores. The claims admitted in respect of the CD is Rs. 153.70 Crores comprising Rs.151.19 Crores due to Financial Creditors, Rs.2.51 Crores due to Operational Creditors, Rs.Nil due to workmen and Rs.Nil due to employees. The details of the claims admitted in this regard is annexed and marked with the Application as Exhibit- C. ii. The business of the CD was mainly dyeing, embroidering, cutting, finishing and allied works in connection with hosiery business. iii. The financial position of the CD was extremely stretched even at the time of the CIRP and the entire operations were leased out for job work. The CD was in default of its obligations to Financial Creditors (NPA) since 26.02.2013. iv. The CD had its manufacturing facilities at Lakshmi Nagar area, Om Sakthi Koil Street, Thottipalayam Village, Tirupur Corporation and the facilities are partly on land of lease right of associate company and partly on land owned by the CD's promoters where the superstructure is put up by the CD. v. The lease arrangement for the CD to use the land of its promoters on which it has put up superstructure is only till 2019 and the entire arrangement between the CD and its promoters does not provide for any automatic lease renewal. Further, a portion of land of lease right of its associate has been leased out to a third party. vi. In such circumstances any person intending to revive the units of the CD by tendering a resolution plan to take over operations of the CD's facilities would be at risk of eviction from the property even as early as 2019 and would face the prospect of having to shift the manufacturing facility set up on lands which are not owned by the CD but are owned by its Directors thus putting a serious question mark on the continuity of operations. vii. In any event there is a large gap between the liquidation value and the admitted claims of the creditors. The CoC vide its 5th Meeting, decided on liquidation of the CD under Section 33(2) of the Code. viii. As the prospect of any eligible person willing to revive the CD appears impractical given the fact that no such Resolution Applicant can even be guaranteed continued use of the facilities of the CD due to the issues of their being no arrangement for long term lease of land beyond 2019 and the manufacturing facilities being partly on such lands over which CD will have no right of continued use, the CoC after careful assessment of the situation was left with no other options but to opt for liquidation under Section 33(2) of the Code as the 180 days period was in any event coming to a close on 12.12.2017. The CoC has also recommended the RP to be appointed as the Liquidator of the Company. The copy of the minutes of the meeting of the CoC of the CD held on 08.12.2017 is annexed and marked with the Application as Exhibit-D.
(3.) In view of the prevailing circumstances as elaborated herein above, a Resolution came to be passed with 100% majority by the CoC in its 5th Meeting for liquidation of the Corporate Debtor viz., M/s. Tiruppur Surya Hitec Apparels Pvt Limited.;