In the matter of Sathi Sai Finance and Investments Limited

IN THE NATIONAL COMPANY LAW TRIBUNAL DIVISION BENCH (COURT– I) CHENNAI ATTENDANCE CUM ORDER SHEET OF THE HEARING HELD ON 08.08.2024 THROUGH VIDEO CONFERENCING PRESENT: HON’BLE SHRI. SANJIV JAIN, MEMBER (JUDICIAL) HON’BLE SHRI. VENKATARAMAN SUBRAMANIAM, MEMBER (TECHNICAL) APPLICATION NUMBER : PETITION NUMBER : CP(IB)/125(CHE)/2024 NAME OF THE PETITIONER(S) : Liquidator of M/s Sathi Sai Finance and Investments Ltd NAME OF THE RESPONDENTS : UNDER SECTION : Sec 59(7) of IBC, 2016 ORDER Present: Ld. Counsel Shri. R Inbaraju for the Petitioner / Liquidator Vide separate order pronounced in Open Court, the company Sathi Sai Finance and Investments Ltd is dissolved. File be consigned to records.

Sd/- Sd/- (VENKATARAMAN SUBRAMANIAM) (SANJIV JAIN) MEMBER (TECHNICAL) MEMBER (JUDICIAL) MG

DIVISION BENCH – I, CHENNAI CP(IB)/125(CHE)/2024 (Filed under Sec. 59(7) of the Insolvency and Bankruptcy Code, 2016) In the matter of Sathi Sai Finance and Investments Limited Nithya Pasupathy, IBBI/IPA-002/IP-N00911/2020-2021/13144 Voluntary Liquidator of Sathi Sai Finance and Investments Limited Registered Office at 2, Ayyanar Koil Street, Koranad, Mayiladuthurai, Nagapattinam District, Tamil Nadu-609 002 … Applicant Present: For Applicant : R.Inbaraju, Advocate

Order Pronounced on 08thAugust 2024 CORAM: SANJIV JAIN, MEMBER (JUDICIAL) VENKATARAMAN SUBRAMANIAM, MEMBER (TECHNICAL) O R D E R (Hearing Conducted through VC) This is a Company Petition filed by the Liquidator of Sathi Sai

Finance and Investments Limited with CIN: U65991TN1990PLC019483 under Section 59(7) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”) seeking dissolution of the Company.

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

2. The Applicant Company was incorporated on 06.08.1990 under the Companies Act, 1956 having its Registered Office at No.2, Ayyanar

Koil Street, Koranad, Mayiladuthurai, Tamil Nadu – 609 002 with Authorized Capital of Rs.50,00,000/- divided into 5,00,000 Equity Shares of Rs.10/- each and Issued, Subscribed and Paid up Capital of Rs.31,22,000/- divided into 3,12,200 Equity Shares of Rs.10/- each. The main object of the Company was:

a) Hire-purchase financing of Motor Vehicles, Domestic appliances etc., b) To advance monies on hypothecation of Buildings Plant and Machineries, etc. c) To advance loan on pledge of gold jewels, ornaments made of gold and silver, silverwares; etc.

Details of the main objects of the company are set out in the Memorandum of Association which is filed along with the typed set.

3. It is stated that Board of Directors in the meeting dated 25.03.2021, passed a Resolution for voluntary liquidation of the company under

Section 59 of the IBC that there are no debts in the Company as on date of declaration of solvency. Further, the board of directors appraised that the Company will be able to pay any debts which may incur in the future

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited whatsoever in full within a period of one year after realizing the assets belonging to the Company/from the proceeds of the assets to be sold in the voluntary liquidation.

4. It is stated that in the Extra-ordinary General Meeting held on 29.03.2021, shareholders approved to appoint the Applicant to act the Liquidator to conduct the voluntary liquidation process of the Company.

5. It is stated that the company had submitted an application on 30.06.1997 to Reserve Bank of India (RBI) for grant of certificate of registration under the provision of Section 45 I-A of the Reserve Bank of India Act, 1934 to carry on the business of Non-Banking Financial

Institution (NBFI). The company was granted the COR bearing No.B-

07.00524 dated 15.11.2000 and accordingly carried on the above business.

6. Thereafter, the Reserve Bank of India vide Revised Regulatory

Framework for NBFCs DNBR (PD) No.CC.002/03.10.001/2014-15) read with Notification No. DNBR.007/CGM(CDS)-2015 dated 27.03.2015, had

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited stipulated the Minimum Net Owned Fund (NOF) of Rs.200 Lakhs to carry on the business of NBFI. The existing companies holding COR issued by the RBI and having NOF of less than Rs. 200 Lakhs, were permitted to carry on the business of NBFI, provided such companies achieve the NOF of 200 Lakhs before 01.04.2017.

7. It is stated that since, the company could not achieve the NOF of Rs.

200 Lakh before April 01, 2017, the Reserve Bank of India issued a Notice to Show Cause as to why the COR issued to the company should not be cancelled under Section 45 I-A of the RBI Act, 1934. The Reserve Bank of India then cancelled the CoR after considering the reply submitted by the Company saying that the reply is not satisfactory. Thereafter, the Board of Directors were exploring various opportunities to diversify the business and for recoveries of the dues from the borrowers. However, since the Board could not find viability for the business, the Board of Directors after detailed deliberation at their meeting held on 25.03.2021 thought it fit to drop the proposal of continuing the business.

Accordingly, the Board of Directors decided to liquidate the affairs of the Company voluntarily, subject to the approval of the members.

Accordingly, the Board of Directors made a Declaration of Solvency and CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited approved the proposal for winding up the company under voluntary liquidation process so that capital invested by the Shareholders could be returned to them. (Copy of cancellation order passed by the RBI is annexed as Annexure 5 of the petition typeset).

8. It is stated that the company did not have any fixed assets except some old furniture and old typewriter in scrap condition having a written down value of zero (cost Rs.26,538/- accumulated depreciation

Rs.26,538/-, book value "zero") as on the date of commencement of liquidation. Company was having long term loans and advances to the extent of Rs.10,63,078/- due from two loan debtors, rent advance paid

Rs.7,500/- and cash and bank balance of Rs. 3,40,175/- apart from the Fixed deposit Rs.81,65,000/- as on the date of passing of resolution for voluntary winding up i.e. 29.03.2021.

9. It is stated that the liquidator has sold the old furniture and typewriter as scrap and realized a sum of Rs.1,000/-. Rent advance of Rs. 7,500/- also was realized. However, the Liquidator could not realize the Income tax refunds immediately. The details of income tax refund and its recovery is given as under:

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

10. It is stated that the liquidator had taken steps to recover the loans and advances but it did not yield any results despite the initiation of civil suits for recovery, which was made by the Board prior to the Liquidation of the company. Considering that there was no progress on this, the shareholders agreed for assigning these loans in favour the shareholders in specie instead of waiting for recovery and distribution.

11. Disbursement to contributories:

11.1. It is stated that a sum of Rs.89,90,566/- was disbursed to contributories towards return of capital first dividend by payment and assignment of two debts to two contributories as per details given below:

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

12. It is stated that a second payout of Rs.78,050/- was distributed to contributories on 2.3.2024. In all, a sum of Rs.90,68,616/- was disbursed to contributories by payment of cash and assignment of debts against the paid up share capital of Rs.31,22,000/-.

13. This Tribunal vide order dated 10.06.2024 sought a clarification observing that the liquidation process commenced on 29.03.2021 and completed on 14.03.2024. As per Liquidation Regulations, the liquidation process should have been completed within a period of one year.

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

14. The Applicant has filed a memo vide S.R.No.3722 dated 22.07.2024.

15. It is stated that regulation 37(1) read with 37(2) provides that if the liquidation process continues beyond twelve months mandate the liquidator has to hold meeting of contributories of corporate debtor at the end every succeeding twelve months till dissolution of the corporate person and present the annual report indicating the progress in liquidation. It is stated that Liquidation commenced on 29.03.2021 and continued beyond twelve months from 29.03.2021for two years and the applicant liquidator had placed progress report for two consecutive twelve months as on 28.03.2021, 28.03.2022 in the contributory meeting held on 06.04.2022 and 08.04.2023 and liquidation was completed on 14.03.2024 before the completion of next 12 months, however the progress report along with receipts and payments from the liquidation commencement date till completion of liquidation intimating completion of liquidation proceedings was placed before the contributories in the third meeting held on 10.04.2024. It is stated that the final report in due compliance of regulation 38 has been filed with this application along with form H. Thus, the requirements of regulation

37 and 38 has been duly complied with.

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

16. It is stated that the applicant company has annexed the following supporting documents as enumerated in the table as under:

17. It is stated that the applicant has conducted the voluntary liquidation process in respect of the Company in accordance with the compliance of IBBI (Voluntary Process) Regulations, 2017. Details of relevant compliances as mandated under Section 59 of IBC r/w IBBI

Regulations, 2017 are as below:

S.NO COMPLIANCE AVERMENTS PAGE NO. IN THE APPLICATION Board Meeting dated 25.03.2021 1 Sec. 59 (3) 160-163 Audited Financial Statements for the Financial Year 2018-2019 & 2019-2020 2 Sec. 59 (3) 45-152 and 2020-2021 Sec 59 (3) (c) EGM dated 29.03.2021 3 And Reg 3 (1)(c) 168-179

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

Section 59 (4) and Declaration of solvency GNL-2 4 Reg 3 (2) 156-159

Special Resolution for voluntary Section 59 (4) and 5 liquidation vide form MGT-14 180-183 Reg 3 Form-A Public Announcement in newspapers dated 01.04.2021 in “The 6 Regulation 14 New Indian Express” (English) & 185-189 “Dina Mani” (Tamil) Intimation to Income Tax department Section 178 of IT Act, and other statutory authorities 7 1961 05.04.2021 201 Filing of Preliminary Report dated 8 Reg 9 05.05.2024 195-200 Opening of Bank Account in the name of the Company followed by Para 15 of the 9 Reg 34 the words in liquidation in a application Scheduled Bank Closure of liquidation bank account 202-209 10 Reg 34 in Karur Vysya Bank Filing of Final Report 11 Reg 38 ANNEXURE 18 Final Report in GNL-2 filed with the 12 Reg 38 ROC dated 15.05.2024 229-232 Submission of Final Report to IBBI on 13 Reg 38 13.05.2024 233-234 Form-H (Compliance Certificate) 14 Reg 38 217-228

18. It is stated that after making various payments including liquidation costs as per the provisions of Section 53(1) of IBC, 2016, the Liquidator has realized and distributed the funds among the shareholders as detailed below:

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

Realization:

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

Distribution:

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

19. Thus on considering the submissions made by the Applicant and after perusing the documents annexed to the application, we find that the affairs of the Company have been completely wound up and the assets of the Applicant Company have been completely liquidated and as such the Applicant Company deserves to be dissolved. Accordingly, in exercise of the powers conferred under Section 59(8) of the IBC, 2016, we order dissolution of Sathi Sai Finance and Investments Limited.

The Applicant Company shall stand dissolved from the date of this order. Accordingly, the Company Petition stands allowed.

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited

20. The Registry and Liquidator are directed to serve a copy of this order upon Registrar of Companies, concerned and also to IBBI within

14 days from the date of this order.

-Sd- -Sd- VENKATARAMAN SUBRAMANIAM SANJIV JAIN MEMBER (TECHNICAL) MEMBER (JUDICIAL)

VinitaVarshini.K

CP(IB)/125(CHE)/2024 Sathi Sai Finance and Investments Limited