NCLT Bengaluru Orders Liquidation of Corporate Debtor After No Verifiable Claims From Creditors
Pranav B Prem
The National Company Law Tribunal (NCLT), Bengaluru Bench of Shri Sunil Kumar Aggarwal (Judicial Member) and Shri Radhakrishna Sreepada (Technical Member) has ordered the liquidation of M/s Konverge Healthcare Private Limited under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC), holding that where no claims are received from either financial or operational creditors and the Committee of Creditors (CoC) cannot be constituted, continuation of the Corporate Insolvency Resolution Process (CIRP) serves no purpose.
Background
The application was filed by Kalpana Kamlesh Gandhi, Interim Resolution Professional (IRP) of the corporate debtor, under Section 33(2) read with Section 60(5) of the IBC, seeking liquidation of the corporate debtor. The CIRP had been initiated on 6 November 2024 upon admission of a Section 7 petition, and the applicant was appointed as IRP. Following her appointment, the IRP issued a public announcement in Form-A on 9 November 2024 in accordance with Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, setting 22 November 2024 as the last date for submission of claims.
Claims Received and Verification Difficulties
By 23 November 2024, only seven claims from operational creditors were received. On 27 November 2024, a claim was filed by a director of the corporate debtor, qualifying as a related party under Section 5(24) of the Code, followed by one more operational creditor claim on 29 November 2024. Despite two reminder emails sent to the financial creditors, no claims were received from them.
As the financial statements did not separately disclose amounts payable to each operational creditor, the IRP forwarded the claims to the suspended board of directors (SBOD) for supporting ledgers. Three reminder emails were sent, but no response or documents were received. Due to the absence of verifiable documents, the operational creditor claims could not be admitted, and without any financial creditor claims, the CoC could not be constituted.
The books of account as on 25 August 2023 reflected assets of ₹18,08,105 and liabilities of ₹6,66,37,431. Bank statements showed limited activity, including credits from a director and an income tax refund, with expenditures towards legal costs and India Infoline.
Reliance on Precedent
The IRP relied on the NCLT Hyderabad Bench decision in Sarthak Gupta & Dolly Gupta v. MLP Developers and Promoters Pvt. Ltd., which held that where no claims are received except from directors and related parties, constitution of a CoC and continuation of CIRP would be futile, and liquidation should be ordered under Section 33(1). Reliance was also placed on the NCLT Ahmedabad Bench ruling in Ms. Prajakta Menezes, IRP of Nana Layja Power Company Ltd., where liquidation was ordered under similar circumstances by invoking the tribunal’s inherent powers.
Tribunal’s Findings
The Bengaluru Bench noted that no financial creditor claims were filed despite reminders, and operational creditor claims could not be verified for lack of supporting documents. Without verifiable claims, the CoC could not be formed. The Bench observed that proceeding with CIRP would serve no useful purpose and placed reliance on the Sarthak Gupta precedent to conclude that liquidation was the appropriate course.
Liquidation Directions
Ordering liquidation under Section 33, the Tribunal appointed the existing IRP as liquidator and issued standard liquidation directions, including:
Prohibition on institution or continuation of suits against the corporate debtor without prior approval of the adjudicating authority.
Cessation of powers of the board of directors and key managerial personnel, with all powers vested in the liquidator.
Public announcement under Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016 within five days, inviting stakeholder claims within 30 days of the liquidation commencement date.
Filing of the liquidator’s preliminary report within 75 days, followed by regular progress reports.
The application was accordingly allowed, and liquidation proceedings were commenced.
The NCLT Bengaluru Bench reiterated that where no claims are received from financial creditors and operational creditor claims cannot be verified, thereby preventing formation of the CoC, the continuation of CIRP is meaningless, and liquidation under Section 33 of the IBC is warranted.
Cause Title: Kalpana Kamlesh Gandhi Interim Resolution Professional of M/s Konverge Healthcare Private Limited
Case No: IA No. (Liq) 01/2025 In C.P. (IB) No. 133/BB/2023
Coram: Shri Sunil Kumar Aggarwal [Judicial Member], Shri Radhakrishna Sreepada [Technical Member]
