In the matter of E M I Transmission Limited

Appearances: For the Applicant : Adv. Mitali Bhatt a/w. Adv. Ayush Rajani i/b. AKR Legal

ORDER Per- Charanjeet Singh Gulati, Member Technical

1. It is an application filed under section 60(5)(c) of the Insolvency & Bankruptcy Code, 2016 (“IBC”) r/w Regulation 45(3)(a) of the IBBI (Liquidation Process) Regulations, 2016, by Mr. Shailesh Bhalchandra Desai, Liquidator of EMI Transmission Limited (“Corporate Debtor”) seeking following reliefs: a. Consider and allow this IA /1656/2023 in terms of Section 60(5) r/w Regulation 45(3)(a) of the IBBI (Liquidation Process) Regulations, 2016 directing the closure of the liquidation process of the Corporate Debtor, EMI Transmission Limited; b. Discharge Mr. Shailesh Bhalchandra Desai as the Liquidator of the Corporate Debtor in terms of the provisions of the Code; c. Direct the Registry to send the order that may be issued by this Hon’ble Adjudicating Authority in the present application to the Registrar of Companies, Mumbai with which the Corporate Debtor, EMI Transmission Limited, is registered; d. Complete any pending activity of handover if any, or any unexpected legal formalities if any within 15 days of this order. e. Allow and authorise the Liquidator to operate only the Liquidation bank account so as to make distribution of in case of any funds received from any of Avoidance Applications filed before Hon’ble Adjudicating Authority and from Recovery from the fraudulent transaction effected in Bank of Baroda. f. Allow an extension of the liquidation period of the Corporate Debtor until the final order in the present application is published. g. Authorise SCC members with Bank of Baroda being a lead bank to represent on behalf of stakeholders in all the applications filed by the Liquidator under Section 43-66 of the Code;

h. Allow the liquidator to destroy all physical copies of the documents and records pertaining to the Corporate Debtor after eight years or on completion of the cases pending whichever is later, and in case storage of the documents and records is required beyond the period of eight years, direct payment of the same by Bank of Baroda; i. Pass any other such order(s) as this Hon’ble Adjudicating Authority may deem fit and proper in the facts and circumstances of this case.

2. The Petition (CP(IB)2660(MB)/2018) was admitted by this Tribunal on 11.04.2019 and CIRP of Corporate Debtor was initiated. Mr. Shailesh Bhalchandra Desai/Applicant was appointed as an Interim Resolution Professional and subsequently, in the first CoC meeting was confirmed as a Resolution Professional.

3. The CoC in their 10th meeting held on 02.01.2020 and consequent e-voting concluded on 06.01.2020 rejected the Resolution Plan by 100% votes. Since the Resolution Plan failed to receive a vote of 66%, Resolution Professional has filed Liquidation Application MA No. 307/2020 u/s 33 of the Code, same was heard on various dates and on 14.08.2020, the Liquidation Order was passed by this Tribunal and the Applicant was appointed as Liquidator.

4. The Applicant has made a public announcement on 19.08.2020 in Form B of Schedule Il as per Regulation 12 of Liquidation Regulations, 2016, towards calling for submission of claims from all the stakeholders.

5. The Applicant has received claims from the creditors. The Applicant has verified the claims based on the supporting documents/information provided by the stakeholder and thus has filed a list of stakeholders before this Tribunal on 09.10.2020, in line with Regulation 31 of IBBI (Liquidation Process) Regulations, 2016. List of Stakeholders is as follows: Sr. Creditors Category % no. 1 Bank of Baroda Secured FC 68.42%

2 Union Bank of India Secured FC 16.61% 3 Standard Chartered Bank Secured FC 2.78% 4 HDFC Bank Secured FC 1.62% 5 Mr. Sanjiv Sheth Unsecured FC 0% 6 Ms. Nalini Menon Rep. of Workmen & Employee 0.06% 7 GST Department 7.73% 8 Godavari Alloys Rep. of OC 2.79%

6. The Applicant constituted the stakeholder’s consultation committee (“SCC”) in terms of Regulation 31A of the Liquidation Process Regulation.

7. The Applicant conducted Thirty-Four e-auction process from 19.10.2020 to 19.10.2022 with “AS IS WHERE IS BASIS”, “AS IS WHAT IS” AND “WHATEVER THERE IS BASIS” AND “NO RECOURSE BASIS”. The mode of sale of assets was in accordance with Schedule - I, under Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016.

8. During the SCC meeting, the Applicant informed the SCC members that as per Regulation 32 of Liquidation Regulations, 2016, sale of the Corporate Debtor as a going concern. A public announcement was given in the newspaper namely Business Standard (Mumbai edition - English) and Navshakti (Mumbai edition - Marathi) for sale of Corporate Debtor as going concern along with remaining assets. The 34th E-auction Process was scheduled for 14.11.2022, however due to certain technical difficulty it was extended till 15.11.2022.

9. The Applicant submits that below mentioned assets were put under Sale: Lot Description Reserve EMD Amount Price (Rs.) (Rs.) Lot 1 All the present assets of the 5.00 Crores 0.50 Crores Company, on a Going Concern Basis as per Regulation 32A of IBBI (Liquidation Process) Regulations, 2016

10. The Applicant submits that he has received the highest bids from L7 Hitech Private Limited and was considered as Successful Bidder to buy the Corporate Debtor as a going concern along with the remaining assets of Corporate Debtor. The Applicant has received the entire amount of sale consideration of Rs. 6.60 Crores, a sale certificate dated 18.11.2022 was also issued to the successful bidder. The E-auction result is as follows: Lot No of EMD’s Reserve Final Sale Successful Total received Price Price (Excl of Bidder Recovery taxes) (Excl of taxes) Lot 1 3 5.00 6.60 Crores L7 Hitech 6.60 Crores Private Crores Limited

11. On 13.04.2023, the Applicant issued a letter to L7 Hitech Private Limited / Successful Bidder confirming the full and final handover of the Corporate Debtor and its charge, properties, receipt of all papers, proceedings etc.

12. On 17.01.2023, L7 Hitech Private Limited/ Successful bidder filed an Interlocutory Application 315 of 2023 before this Tribunal, seeking certain directions, reliefs, concessions and necessary approvals for effectuating the transfer of the Auction Assets in favour of L7 Hitech Private Limited as the Successful Bidder. The said IA No. 315 of 2023 was disposed of by this Tribunal vide order dated 08.12.2023.

13. The Applicant submits that during 6th SCC meeting held on 10.03.2023, the SCC members have finalized that the applications filed by the Applicant for avoidance transaction will be pursued by the SCC members with Bank of Baroda being a lead bank. The list of pending avoidance applications as under: i. IA/1315/2020 ii. IA/1310/2020 iii. IA/1548/2020 iv. IA/1757/2020 v. IA/352/2021 vi. IA/355/2021 vii. IA/380/2021 viii. IA/1359/2021 ix. IA/1629/2021 x. IA/177/2022

14. The Applicant submits that the liquidation costs has exceeded the estimated liquidation cost provided for in the preliminary report on account of running of liquidation process by more than 30 months instead of 1 year against which the liquidation cost estimated.

15. Further, in compliance of the Regulation 45(3)(a) of the Liquidation Process Regulations, the Applicant has filed the present Application for closure of the liquidation process of the Corporate Debtor under Regulation 45 (3)(a) of the Liquidation Process Regulations. The Applicant has also filed the final report and the compliance certificate in Form H before this Tribunal.

16. The details of the assets as per Asset Memorandum and Final Sale Report are as under: Sr. Assets Mode of Estimated Realisation Date of No. Sale Liquidation Amount (INR) Transfer to Value (INR) Liquidation Account 1 Recovery from 0 4,02,228 02.09.2020 Account of BoB 2 Recovery pursuant 2,65,00,000 2,65,00,000 21.09.2020 to the filing of application u/s. 43 of the Code against Mr. Nitin Dholakia 3 Recovery from 11,57,900 11,57,900 20.10.2020 Current Account of HDFC 4 Recovery from 2,02,000 2,02,000 29.10.2020 Current Account of UBI 5 GST Credit 28,60,776 28,60,776 available forming part of liquidator estate 6 GST Refund 31,13,773 31,13,773 12.11.2020 7 Hyundai Xcent 1.2 E-Auction 2,44,826 4,33,044 From VTVTS- Regn- MH- 17.11.2020 to 15-ES-9966 27.11.2020 8 Maruti Vitara E Auction 3,76,210 7,77,017 From Brezza ZDI Plus 17.11.2020 to MH-15-FN-566 27.11.2020 9 6 Residential Plots E Auction 19,93,748 28,50,000 From each 1,200 Sq Ft. 17.11.2020 to Project 27.11.2020 “Humdevanagiri” – Site No. 110, 111, 112, 131, 132 & 133 at Gowdasandra Village, Kasara Hobili, Gauribidanur Taluk, Karnataka 10 Recovery from E Auction 15,70,615 15,70,615 08.12.2020 & Debtors (Power 16.12.2020 Grid Corporation) 11 Recovery from 19,92,797 19,92,797 09.02.2021 Debtors (Adani Transmission India Limited) 12 Agricultural Land Private Sale 1,76,40,000 1,51,00,000 From at Survey No. 160; 22.03.2021 to Area 18000 sqmt 18.06.2021 13 Recovery from 53,83,244 16.06.2021 Kalpataru Power Transmission towards wrongful invocation of BG in liquidation period 14 Sale of Shares of Stock 5,28,241 10,33,331 19.06.2021 Bank of Baroda & Exchange Indian Bank 15 Non Agricultural E Auction 2,83,74,500 2,00,00,000 19.07.2021, land at Survey No. 23.07.2021 & 157/2/2; Area 26.07.2021 9275 sqmt 16 Recovery from KEC 1,83,90,060 22.11.2021 International Limited towards wrongful invocation of BG in CIRP 17 Maruti Ertiga VXI E Auction 2,79,595 5,93,186 04.10.2021 & BSIV- MH-15-EX- 08.10.2021 3729 18 Non-Agricultural E-Auction 11,01,68,065 27,73,07,483 From land; Building 02.02.2022 to thereupon and 29.03.2022 Machinery installed therein on survey No. 157/1+2/1; 157/2/2; 158/2 in Village Bramhanwade, Shinde- Naigaon Road, Taluka- Sinnar, District- Nashik, Maharashtra 19 Office premises E Auction 21,76,66,230 16,50,00,000 From with furniture and 02.02.2022 to equipment’s along 29.03.2022 with 10 car parking slots situated at Centre Point, CTS no. 107, Unit No.101, 1st Floor, Dr. B. A. Road, Parel, Mumbai- 400012 20 Nashik Factory 15,73,600 15,73,600 04.05.2022 Electricity Security Deposit 21 Misc.

Scrap Sale at 84,998 17.05.2022 Nashik & Parel Premises 22 Machines of the CD E auction 10,62,04,327 2,19,82,174 From 21.12.2020 to 22.01.2021 23 Machines of the CD 1,93,07,470 From 13.01.2021 to 19.01.2021 24 Machines of the CD 74,57,289 From 10.02.2021 to 17.02.2021

25 Machines of the CD 49,30,195 From 15.03.2021 to 30.03.2021 26 Machines of the CD Private Sale 23,73,579 22.03.2021 & 25.03.2021 27 Machinery at E-Auction 66,14,608 21.06.2021 & Survey No. 157/1; 25.06.2021 157/2/1; 157/2/2 28 Consumables Private Sale 8,14,811 12.02.2021 29 Sale of the Scrap E- Auction 1,51,20,896 7,46,31,808 17.11.2020 to 30.12.2020 30 Sale of the Scrap E- Auction 85,76,245 22.01.2021 to 28.01.2021 31 Sale of the Scrap E-Auction 1,22,11,392 28.01.2021 to 09.02.2021 32 Sale of Scrap and E-Auction 48,78,647 05.02.2021 to forklift trucks 13.02.2021 33 Sale of the Scrap E-Auction 1,54,32,080 17.02.2021 to 28.03.2021 34 Scrap & Machines E-Auction 1,19,38,358 22.03.2021 to 18.06.2021 35 Private Sale of Private Sale 9,53,440 07.09.2021 to Scrap 09.09.2021 36 All the remaining E-Auction 0 6,60,00,000 03.10.2022 to assets of the 16.11.2022 Company, on a going concern basis as per Regulation 32A of IBBI (Liquidation Process) Regulations, 2016 Total 80,44,28,148

17. Certain discrepancies in amounts were noted in Form H, and clarification were sought for the same vide order dated 15.04.2024. In compliance with the said order, the Applicant filed an additional affidavit dated 30.04.2024 and has presented clarification chart, which is reproduced below:

Sr. Date Bank of Union Bank Standard HDFC Bank Total No Baroda (Rs.) of India (Rs.) Charterred (Rs.) Distribution. Bank (Rs.) (Rs.) 1. 09.10.20 2,06,39,674 50,22,261 8,38,065 2,65,00,000 2. 13.11.20 22,66,446 5,51,495 92,028 29,09,969 3. 30.12.20 6,29,92,282 1,52,93,512 25,57,774 8,08,43,568 4. 30.12.20 11,57,042 - - 11,57,042 5. 01.02.21 1,80,06,283 43,71,636 7,31,137 2,31,09,056 6. 24.02.21 2,31,19,096 56,12,944 9,38,741 2,96,70,781 7. 31.03.21 89,60,654 21,75,503 3,63,843 1,15,00,000 8. 30.04.21 1,48,94,927 36,16,249 6,04,802 1,91,15,978 9. 29.06.21 71,24,859 15,44,563 3,16,386 89,85,808 10. 27.07.21 1,33,18,945 32,33,625 5,40,810 1,70,93,380 11. 24.09.21 1,16,87,810 28,37,612 4,74,578 1,50,00,000 12. 28.03.22 20,68,40,780 5,03,65,801 84,23,463 26,56,30,044 13. 26.12.22 4,53,24,240 1,10,36,468 18,45,802 5,82,06,510 14. 28.03.23 31,05,531 7,56,198 1,26,471 39,88,200 15. 09.03.22 1,15,00,000 1,15,00,000 16. 14,85,00,000 14,85,00,000 Total 43,94,38,569 10,64,17,867 1,78,53,900 16,00,00,000 72,37,10,336

18. We observe that the Corporate Debtor has been sold to L7 Hitech Private Limited as a going concern, the entire sale consideration has been received. The same has been distributed among the stakeholders in accordance with the provisions of Section 53 of the Code, read with Regulation 42 of the Liquidation Process Regulations. The Chart in paragraph 16 of this order does not reflect the opening balance. Further, the aforementioned chart at para 17, clarifies the distribution to the secured creditors, with an amount of Rs. 72,37,10,336 being distributed to them.

19. Provident Fund dues amounting to Rs. 6,67,484 have been paid in full, as evident from the Statement of Receipt and Payments, 2021. Furthermore, workmen dues (Rs. 5,67,630) have been paid, as per the Statement of Receipt and Payments of 2022 attached to the present application. Moreover, the closing balance remaining in the bank account is Rs. 14,01,548 as seen from the Statement of Receipt and Payments, 2023. From the statement of Receipts and Payment for the years ended on 31.03.2021, 31.03.2022 and 31.03.2023 it is seen the liquidation costs have been incurred as under:

Sr. Year Liquidation Cost (in Rs.) No. 1. 2021 4,39,13,540 2. 2022 3,20,68,152 3. 2023 47,25,188 Total 8,07,06,880

20. Furthermore, regarding the operation of Bank Account, the Applicant has submitted in their additional affidavit that after settling the current liquidation expenses (till the date of issuance of closure order) and transferring the balance amount to the secured creditors, the specified/Liquidation account will be closed. Following this, the lender will proceed with the avoidance application, and any recovered amount will be deposited according to the lender’s designated account.

21. In view of the aforesaid facts, we are of the considered opinion that this is a fit case for the closure of the liquidation process of the Corporate Debtor. Accordingly, we hereby order the closure of the liquidation process of the Corporate Debtor i.e. EMI Transmission Limited. Mr. Shailesh Bhalchandra Desai Applicant/Liquidator has been discharged from the date of this order.

22. Further, Bank of Baroda has been authorised to represent on behalf of stakeholders in all the application filed by the Liquidator under Section 43 and 66 of the Code.

23. Registry is directed to communicate this Order to the Registrar of Companies, Mumbai and to the Insolvency and Bankruptcy Board of India;

24. The IA-1656/2023 filed by the RP for the closure of the liquidation process of the Corporate Debtor stands allowed.

Sd/- Sd/- CHARANJEET SINGH GULATI LAKSHMI GURUNG (MEMBER TECHNICAL) (MEMBER JUDICIAL)

Arpan, LRA