In the matter of Cns Fashion Retail Private Limited

IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH (COURT – II) Item No. 214 IB-1024/ND/2020 IA-3/ND/2025 IN THE MATTER OF: Concept Group … Petitioner/Operational Creditor Versus Cns Fashions Retail Pvt Ltd … Respondent Under Section: 9 of IBC, 2016 Order delivered on 20.04.2026 CORAM: SH. ASHOK KUMAR BHARDWAJ SH. ATUL CHATURVEDI HON’BLE MEMBER (J) HON’BLE MEMBER (T) PRESENT: For the Applicant : Adv Rishi Sood, Adv Gurjot Singh For the Respondent : For the Liquidator : Mr. Savar Mahajan, Mr. Srivatsava Reddy Beerapalli along with Ms. Pooja Bahry (Liquidator) For the Suspended : Adv. Nitish Kant Sharma Directors Hearing Through: VC and Physical (Hybrid) Mode

ORAL ORDER IA-3/ND/2025: The present Application has been filed by the Liquidator of the Corporate Debtor, M/s. CNS Fashion Retail Private Limited under Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 14 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, seeking early dissolution of the Corporate Debtor. The prayer made in the captioned Application reads thus:- “a) Allow the present application and pass an order of dissolution under Section 54 of the Corporate Debtor, directing the Corporate Debtor i.e. CNS Fashion Retail Private Limited, bearing CIN No. U18104DL2016PTC309024 to be dissolved; b) Clarify who will bear the costs which are to be paid towards conducting the corporate insolvency resolution process and the Hetash/Abhijat liquidation process, in a case where there are no assets in the Corporate Debtor; or in the alternative c) direct to SCC (including the Related parties without Voting Rights) before dissolution, for reimbursement of outstanding CIRP Costs of INR 2,82,580 and Liquidator Fees (@ INR 1 Lakh per month on pro-rata basis), as decided in the 5th CoC meeting and as per updated CIRP Cost Sheet provided by the erstwhile RP; d) Direct the members of the SCC (including the Related Parties without Voting Rights) to contribute towards the liquidation process costs of the Corporate Debtor as per the provisions of the Code and underlying regulations; Discharge and relieve Ms. Pooja Bahry from her duties as the Liquidator of the Corporate Debtor as per Section 35 of the Code; f) To issue directions to the Registrar of Companies to update the status of the Corporate Debtor, CNS Fashion Retail Private Limited as dissolved pursuant to allowing this application; and g) Pass any other order or order(s) as this Hon'ble Adjudicating Authority may deem fit in the facts and circumstances of the present case.” 2. Our attention is drawn to the 2nd meeting of the Stakeholders’ Consultation Committee (SCC) held on 04.07.2024, wherein the members of the SCC resolved that since no assets were available in the Corporate Debtor, the Applicant should file an Application under Section 54 of the Code read with Regulation 14 of the Liquidation Process Regulations, seeking early dissolution of the Corporate Debtor and also give the reasons for seeking such early dissolution.

The said agenda was approved by the members of the SCC with 100% assent. The relevant excerpt of the agendas of the said meeting reads thus:-

Hetash/Abhijat

3. As can be seen from Section 54 of IBC, 2016, where the assets of the corporate debtor have been completely liquidated, the liquidator should make an application to the Adjudicating Authority for the dissolution of the corporate debtor and the Adjudicating Authority shall on application being filed by the Liquidator, dissolve the corporate debtor. The Section 54 reads thus:- “ 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 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.”

Hetash/Abhijat

4. It is also pertinent to refer to Regulation 14 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, which provides for early dissolution of the Corporate Debtor in appropriate cases. The said Regulation reads thus:- “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.” 5. Our attention is drawn to the Form H filed in terms of Regulation 45(3) of the IBBI (Liquidation Process) Regulations, 2016. It is seen from the said Form H that there were no assets of the Corporate Debtor available for sale. It is also seen that the amount realized during the liquidation process consisted only the balance recovered from the bank accounts of the Corporate Debtor, amounting to INR 17,881/-. Form H also contains the details of the claims of the members of the Stakeholders’ Consultation Committee. The relevant excerpt of Form H reads thus:-

Hetash/Abhijat

Hetash/Abhijat

6. As can be seen from the Final Report prepared by the Liquidator in terms of Regulation 45 (ibid.), no assets of the Corporate Debtor were available for sale or liquidation. 7. We are conscious of the fact that the facts and circumstances of the present case indicate that no useful purpose would be served by continuing the Corporate Debtor in the liquidation process under the provisions of the Code, particularly when the Corporate Debtor has no realizable assets. 8. It is not gainsaid that the ultimate objective of the Code is either to resolve the insolvency of the Corporate Debtor by way of an approved Resolution Plan or where resolution is not feasible, to ensure its dissolution in an expeditious manner so as to maximize the value of assets and balance the interests of stakeholders. The facts of the present case shows that continuation of the insolvency or liquidation process would serve no practical purpose and therefore, this Adjudicating Authority in exercise of its jurisdiction under the Code read with Rule 11 of the National Company Law

Hetash/Abhijat

Tribunal Rules, 2016, may pass such appropriate orders as may be necessary in the interest of justice and for timely conclusion of proceedings. 9. As regards the issue of bearing the costs incurred towards conducting the Corporate Insolvency Resolution Process and the liquidation process in a case where no assets are available with the Corporate Debtor, is concerned, it is apposite to refer to our order dated 15.01.2025, wherein it was specifically directed that the creditors, irrespective of whether they are related parties, shall bear the liquidation costs as determined in accordance with law. It is further clarified that the said direction shall also extend to the unpaid CIRP costs, if any, which remain outstanding for appropriate treatment. The order dated 15.01.2025 reads thus:-

Hetash/Abhijat

10. It is clarified that dissolution of the Corporate Debtor shall not, in any manner, absolve the Promoters/Directors of the Corporate Debtor from any personal liability or guarantee furnished in respect of the Corporate Debtor under any law for the time being in force. 11. In view of the Final Report and the certificate furnished in Form H, it is clear that there are no assets of the Corporate Debtor available for distribution and no liquidation proceeds capable of being disbursed amongst the creditors are there. Accordingly, no useful purpose would be served in keeping the liquidation process pending. Therefore, in exercise of powers conferred under Section 54(2) of the Insolvency and Bankruptcy Code, 2016, the Corporate Debtor, M/s. CNS Fashion Retail Private Limited, is hereby dissolved.

Hetash/Abhijat

12. The Liquidator shall forward a copy of this Order passed under Section 54(2) of the Code, to the concerned Registrar of Companies / Regional Director and IBBI within seven days from the date of this Order. 13. The Liquidator shall comply with the provisions of Regulation 45A of the IBBI (Liquidation Process) Regulations, 2016. The present Application stands disposed of.

Sd/- Sd/-Sd/- (ATUL CHAT URVEDI) (ASHOK KUMAR BHARDWAJ) MEMBER (T) MEMBER (J)

Hetash/Abhijat