In the matter of VIDEO WORKS STUDIO PRIVATE LIMITED

For the Applicant / RP / Liquidator : Adv. Avinash R Khanolkar a/w Adv. Surekha Yadav.

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 ORDER

Per: Anil Raj Chellan, Member (Technical)

1. This IA-07/2025 was filed on 14.12.2024 by the Applicant under Section 33 of the Insolvency and Bankruptcy Code, 2016 (Code) for initiating the liquidation process of Video Works Studio Private Limited (Corporate Debtor).

2. The facts leading to the filing of this application are as follows:

a. This Tribunal initiated Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor vide order dated 13.08.2024 upon admission of C.P.(IB)/387(MB)/204 under Section 7 of the Code, and Ms. Anagha Anasingaraju, was appointed as the Interim Resolution Professional (IRP) of the Corporate Debtor.

b. During the CIRP, the IRP caused public announcement inviting claims from the creditors of the Corporate Debtor in terms of the provisions of Section 15 of the Code read with Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations). In addition, the IRP, in accordance with the provisions of Regulation 6A of the CIRP Regulations, sent letters to the creditors of the Corporate Debtor, whose names were appearing in the last available books of accounts of the Corporate Debtor.

c. In response to the public announcement, the IRP has received two claims from the secured financial creditors of the Corporate Debtor, namely, one claim by the original applicant for an amount of Rs.5,73,17,127.60/-, and another claim by Bank of India for an amount of Rs.2,24,94,227.27/-. It is MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 also submitted that before the last date mentioned in the public announcement, there was no other claim received by the Applicant.

d. Accordingly, based upon the claims received, the Applicant formed the Committee of Creditors (CoC) of the Corporate Debtor, which consists of (i) Janaseva Sahakari Bank Limited, Pune (voting share of 71.82%); and (ii) Bank of India (voting share of 28.18%). The Applicant convened the first meeting of the CoC on 10.09.2024 to discuss the further course of action. Accordingly, the members of the CoC deliberated over the further course of action, and also the Applicant's appointment as RP in terms of Section 22 (3) (a) of the Code. The Tribunal vide order dated 29.10.2024 confirmed the appointment of the Applicant as RP.

e. In the interregnum, the Applicant informed the Directors of the Suspended Board of the Corporate Debtor about the initiation of CIRP on 14.10.2024 and requested them to furnish the required details about the Corporate Debtor. As informed by the Directors, and after going through the available financial statements of the Corporate Debtor, it was noticed that the Corporate Debtor was in the business of letting out cameras and lenses for the shooting of films/serials. However, it was noticed by the Applicant that the Corporate Debtor has not been in operation since 2021- 2022. The Directors of the Suspended Board of the Corporate Debtor also informed that most of the cameras/lenses belonging to the Corporate Debtor have become technologically obsolete, or are not in working condition, and besides these, there are no further assets possessed or owned by the Corporate Debtor. The Corporate Debtor does not hold any fixed assets in the nature of immovable assets.

f. The Applicant convened the third CoC meeting on 13.11.2024, which was called initially to discuss the possibility of revival of the Corporate Debtor and to discuss the agenda for publication of the Invitation for Expression

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 of Interest for submission of the Resolution Plan for the Corporate Debtor. However, during the meeting, the Applicant apprised the CoC members about the status of assets owned by the Corporate Debtor and the present status of the business of the Corporate Debtor. Then, the members of CoC were of the opinion that the revival of the Corporate Debtor might not be a fruitful exercise, as no interested party would come forward to acquire the Corporate Debtor.

g. Accordingly, with further deliberate discussion over the issue, the CoC, in its commercial wisdom, decided to go ahead with the liquidation of the Corporate Debtor instead of inviting the Expression of Interest.

3. It is stated and submitted that the above decision of the CoC has been taken in terms of provisions of Section 33(2) of the Code, which reads as under:

“(2) Where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less than sixty-six per cent. of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).

Explanation. - For the purpose of this sub-section, it is hereby declared that the committee of creditors may take the decision to liquidate the corporate debtor, any time after its constitution under sub-section (1) of section 21 and before the confirmation of the resolution plan, including at any time before the preparation of the information memorandum.”

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 4. However, it is stated and submitted that since the said agenda was not included in the notice of calling the third CoC meeting, the Applicant thought fit to circulate the requisite resolution for initiation of the Liquidation Process of the Corporate Debtor along with the ancillary Resolutions with the Members of the CoC for their necessary approval through email. Accordingly, the members of the CoC, vide their respective emails, assented to the resolutions.

5. The Applicant herein has also given her written consent to act as the Liquidator of the Corporate Debtor, and the same is attached as Annexure 9. Hence, the present Interlocutory Application has been filed seeking the liquidation of the Corporate Debtor.

6. We have heard the Ld. Counsel for the Applicant and perused the material available on record.

7. In the present case, the RP filed the application for ordering the liquidation of the Corporate Debtor based on the resolutions passed by the CoC. However, it has been observed from the minutes of the CoC that not all the assets owned by the Corporate Debtor have been taken under control and possession of the Applicant. Even for the movable assets that have been taken into possession, no valuation of the assets has been carried out. Although the Applicant states that the Corporate Debtor does not own any fixed assets, the financial statement attached with the Application shows (i) Tangible assets – Rs.6,79,13,583/-, (ii) Non-current investments –Rs. 6,00,000/-, (iii) Long Term loans and Investments – Rs.1,45,20,300/- (iv) Trade Receivables Rs.5,840,000/- and (iv) other current assets – Rs. 2,67,109/-. Additionally, while the CoC agreed with the RP to file an application under section 19(2) of the Code, it appears that no application has been filed. The transaction audit has also not been done. Therefore, it MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 appears that many actions required to be undertaken in the CIRP are still pending without a proper explanation.

8. Moreover, it is noteworthy that Form-G has never been published. During the CoC meeting held on 13.11.2024, the following resolutions were passed:

“RESOLVED THAT pursuant to the provisions of Section 33(2) of the Insolvency and Bankruptcy Code 2016, the Corporate Debtor, Video Works Studio Private Limited, be liquidated AND THAT the Resolution Professional be and is hereby authorized to inform this decision of the Committee of Creditors to the Hon’ble NCLT, Mumbai Bench by filing appropriate application for necessary orders.”

“RESOLVED THAT as per provisions of Section 33 of insolvency and Bankruptcy Code, 2016 CS Anagha Anasingaraju, the Resolution Professional being eligible to be appointed as Liquidator in terms of Regulation 3 insolvency and Bankruptcy Boord of India (Liquidation Process) Regulations, 2016, be appointed as the Liquidator of the Corporate Debtor on such fees as may be approved by the Committee under Regulation 39D of insolvency and Bankruptcy Boord of lndio (insolvency Resolution Process for Corporate Persons) Regulations, 2076 read with Regulation 4 of insolvency and Bankruptcy Board of lndio (Liquidation Process) Regulations, 2016 AND THAT the decision of the Committee of Creditors be communicated to the Hon'ble NCLT Mumbai Bench, IBBI and other persons as may be required under the provisions of the Code."

"RESOLVED THAT pursuant to Regulation 39D of insolvency and Bankruptcy Board of India (insolvency Resolution Process for Corporate Persons) Regulations, 2076 read with Regulation 4 of insolvency ond Bankruptcy Board of India (Liquidation Process) Regulations, 2076, in case an order of Liquidation of Corporate Debtor is passed by the Adjudicating Authority under Section 33 of the insolvency and Bankruptcy Code, 2016, CS Anagha Anasingaraju, the Resolution Professional being appointed as the Liquidator of the Corporate Debtor be paid fees of Rs. 1,00,000 plus GST per month for the period of liquidation of the Corporate Debtor along with the reimbursement of the expenses that may be incurred by her

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 in connection with carrying out duties and responsibilities during the liquidation process of the Compony, as moy be mutually decided by the COC Member ond the Liquidator."

9. As per Section 33 (2) of the Code, where the resolution professional, at any time during the corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating Authority of the decision of the committee of creditors approved by not less than sixty six percent of the voting share to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order. A plain reading of this provision indicates that the decision regarding whether to liquidate the corporate debtor falls squarely within the commercial decision of the CoC.

10. In the matter of Sreedhar Tripathy vs. Gujarat State Financial Corporation and Ors. [(12.10.2022 - NCLAT): MANU/NL/0788/2022], the Hon’ble NCLAT has stated in para 7 as under:

“The Explanation under Section 33(2) has been inserted by Act of 26 of 2019 contains the legislative declaration and intention. The CoC in the Legislative Scheme has been empowered to take decision to liquidate the Corporate Debtor, any time after its constitution and before confirmation of the resolution plan. The power given to the CoC to take decision for liquidation is very wide power which can be exercised immediately after constitution of the CoC. The reasons which has been given in Agenda Item 1, it is made clear by the CoC that the Corporate Debtor is not functioning for last 19 years and all machinery has become scrap, even the building is in dilapidated condition and the CIRP will involve huge costs. We are not convinced with the submission of learned counsel for the Appellant that the CoC's decision is an arbitrary decision. CoC is empowered to take decision under the statutory scheme and when in the present case the decision of the CoC for liquidation has been approved by the Adjudicating Authority, we see not good ground to interfere at the instance

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 of the Appellant. However, we make it clear that the decision taken by the CoC was in the facts of the present case and it cannot be said that whenever decision is taken for liquidation the same is not open to judicial review by the Adjudicating Authority and this Appellate Tribunal. It depends on the facts of each case as to whether the decision to liquidate the Corporate Debtor is in accordance with the I & B Code or not. With these observations, the Appeal is dismissed.”

11. In the instant matter, we observe that CoC has recommended the name of the present Applicant to be appointed as the liquidator of the Corporate Debtor. However, we notice that several actions that should have been carried out during the CIRP are still pending. These actions include taking custody and control of all assets of the Corporate Debtor, appointing registered valuers within the specified time for valuation of assets, and forming an opinion whether the Corporate Debtor has been subjected to any transaction covered under Sections 43,45, 50 and 66 of the Code. Further, IBBI, pursuant to Section 34(4) (b) of the Code, recommended vide its letter dated 18.07.2023 that a person other than the interim resolution professional/resolution professional in a case should be appointed as liquidator. Therefore, we are of the view that it would be appropriate to appoint another person as the liquidator of the Corporate Debtor.

12. Based on the foregoing discussions, we observe that the Corporate Debtor ceased its business operations before the insolvency commencement date, and the assets that have been traced so far may not generate sufficient interest for the resolution of the Corporate Debtor. Moreover, CoC with the requisite majority passed a resolution for the liquidation of the Corporate Debtor. In the light of these circumstances, and upon satisfaction of requirements under Section 33(2) of the Code, we consider it appropriate to pass an order for the liquidation of the Corporate Debtor.

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 13. Hence, this Bench orders as follows: ORDER a. The captioned Application is allowed. Consequently, the Corporate Debtor, Video Works Studio Private Limited, is ordered to be liquidated in the manner as laid down in Chapter III of the Code.

b. We hereby appoint Ms. Smita Gupta, Insolvency Professional, having Registration No. IBBI/IPA-001/IP-P-02768/2023-2024/14283, email: sumitaya131@gmail.com, Mob. No: 9413052976; address- Flat no 702, 7th floor ,Godrej Central J Tower, Shell Colony, Near Tilak Nagar Railway Station, Chembur, Mumbai, Mumbai Suburban, Maharashtra- 400071, as Liquidator of the Corporate Debtor, viz., Video Works Studio Private Limited. The appointment shall be subject to her possessing a valid Authorisation for Assignment (AFA) issued by the Insolvency Professional Agency (IPA) of which she is a professional member, in terms of regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2019. The Liquidator is directed to submit her consent to act as Liquidator within 10 days of receipt of this order. The erstwhile RP/Applicant shall hand over all papers and documents in her possession concerning the Corporate Debtor to the Liquidator appointed in this matter within 10 days.

c. The Liquidator shall initiate the liquidation process as envisaged under Chapter III of the Code and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations). She shall take into her control all the assets of the Corporate Debtor, and also form an opinion with respect to the preferential transactions.

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 d. All the powers of the Board of Directors and key managerial persons shall cease to exist in accordance with section 34(2) of the Code. All these powers shall henceforth vest in the Liquidator. The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code, read with the Liquidation Process Regulations.

e. The Moratorium declared under Section 14 of the IBC shall cease to operate from the date of this Order.

f. The Liquidator shall issue public announcement stating that the Corporate Applicant is in Liquidation.

g. Subject to Section 52 of the Code, no suit or other legal proceedings shall be instituted by or against the Corporate Debtor.

h. Personnel connected with the Corporate Applicant shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs.

i. This Order shall be deemed to be a notice of discharge to the officers, employees, and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the liquidation process by the Liquidator.

j. The Liquidator shall submit progress reports as per Regulation 15 of the Liquidation Process Regulations.

k. The Liquidator is hereby authorised to represent the Corporate Debtor before the Government Authorities, if need be.

14. Registry shall furnish a copy of this Order to the Insolvency and Bankruptcy Board of India; Regional Director (Western Region), Ministry of Corporate

MUMBAI BENCH, COURT-IV IA-07(MB)2025 IN C.P.(IB)/387(MB)2024 Affairs; Registrar of Companies; Official Liquidator, Maharashtra; the Registered Office of the Corporate Applicant; and the Liquidator, Ms. Smita Gupta.

15. Needless to say, the CoC shall ratify and clear the fees of the erstwhile Resolution Professional of the Corporate Debtor, if any, due and payable.

16. With the aforesaid observations and directions, IA (Liq.) No. 7 of 2025 stands disposed of as allowed.

17. Ordered Accordingly.

Sd/- Sd/- ANIL RAJ CHELLAN K R SAJI KUMAR MEMBER (TECHNICAL) MEMBER (JUDICIAL) /S. Dubey/