In the matter of You Seung Sang Sa India Construction Private Limited

IN THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH – II, CHENNAI IA (IBC)/ 1908 (CHE) / 2023 IN CP (IB) / 796 (CHE) / 2020 (Under Section 33(1) & 33(2) of Insolvency & Bankruptcy Code, 2016) Shri Harsh Garg, Resolution Professional of M/s. You Seung Sang Sa India Construction Private Limited, No. 170, Sector 21 – A, Chandigarh – 160 022. … Applicant /Resolution Professional In the matter of Monika Gupta, Sole Proprietor of M/s. Monika Traders … Applicant /Operational Creditor Versus M/s. You Seung Sang Sa India Construction Private Limited … Respondent /Corporate Debtor Order Pronounced on 26th July 2024 CORAM Shri JYOTI KUMAR TRIPATHI, MEMBER (JUDICIAL) Shri RAVICHANDRAN RAMASAMY, MEMBER (TECHNICAL) For Applicant: Mr. Varinder Chhibbar, Advocate ORDER (Heard through video conferencing) 1. IA (IBC)/1908 (CHE)/2023 in IBA/796(CHE)/2020 is an application filed under Section 33 of the Insolvency & Bankruptcy code, 2016 (herein after termed as “the Code”) by Mr. Harsh Garg, RP of M/s. You Seung Sang Sa India Construction Private Limited, the Corporate Debtor (hereinafter referred as “CD”) seeking following reliefs as follows, “1. Pass an order requiring the corporate debtor i.e., M/s. You Seung Sang Sa India Construction Private Limited to be liquidated in a manner as laid down in the IA(IBC)/ 1908(CHE)/2023 IN IBA/796/2020 – Harsh Garg, RP In the matter of M/s. M/s. You Seung Sang Sa India Construction Private Limited 1 OF 12

Insolvency and Bankruptcy Code, 2016, and to appoint Sh. Harsh Garg as the Liquidator. 2. Issue public announcement stating the corporate debtor is in liquidation 3. Pass an order requiring to send liquidation order to the authority with whom the corporate debtor is registered” 2. The corporate debtor, M/s. You Seung Sang Sa India Construction Private Limited, located at No.342/1, New No.523, Anna Salai, Nandanam, Chennai, Tamil Nadu - 600 035, was admitted to Corporate Insolvency Resolution Process, (hereinafter referred as “CIRP”) vide an order dated 09.08.2021 passed by this Adjudicating Authority. Mr. Harsh Garg, was appointed as the Interim Resolution Professional of the CD. 3. Form the Compliance certificate (Form H) attached with the application the dates and events subsequent to initiation of CIRP of the CD is as follows, S. No Date Events 1 09.08.2021 Commencement of CIRP & Appointment of IRP 2 12.08.2021 Publication of Public announcement 3 27.08.2021 Constitution of Committee of Creditors (CoC) by IRP 1st CoC meeting confirming IRP as RP, Appointment of 4 03.09.2021 Valuers 5 10.09.2021 Filed IA(IBC)/993(CHE)/2021 (Seeking Co-ooperation) 6 23.09.2021 Appointment of Registered Valuer for Plant and Machinery 7 29.09.2021 Issue of Invitation for EoI 8 14.10.2021 Last date for submission of EoI 4th CoC Meeting where the Agenda of Liquidating CD is proposed for the first which was rejected by the CoC. 9 15.10.2021 Directed the RP to pursue the IA(IBC)/993(CHE)/2021 Final List of Eligible Prospective Resolution Applicants 10 08.11.2021 (However No Expression of Interest were received) 11 28.11.2021 Last date of Submitting Resolution Plan ( No Plan Received) IA(IBC)/160(CHE)/2022 (Seeking Exclusion from 12 28.01.2022 10.09.2021) 13 05.02.2022 Expiry of 180 days of CIRP 14 05.07.2022 Expiry of 330 days (No Extension Exclusion Granted) 15 26.10.2022 Order dismissing the IA(IBC)/160(CHE)/2022

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7th CoC meeting, wherein CoC decided to file appeal against 16 02.11.2022 the Order dated 26.10.2022 17 30.01.2023 8th CoC meeting wherein resolved for Liquidation of the CD Date of filing Liquidation application before this 18 05.03.2023 Adjudicating Authority 4. It is stated that after appointment the applicant received claims from the Creditors of the CD and formed the CoC of the CD. 5. The final Composition of CoC is only of Operational Creditors and extracted as follows,

6. The applicant submits that the suspended Directors of the Corporate Debtor were South Korean Nationals who left the country prior to CIRP. Except the Residential addresses in South Korea and email addresses no details of them are available. The registered office and other addresses of the CD which were know from the website of the CD had been inspected by the applicant and found all to be rental offices which were vacated long before. 7. It is submitted that the applicant as he did not get any co-operation from the Directors and Statutory Auditors of the CD, applicant filed IA(IBC)/993(CHE)/2021 seeking direction for co-operation from the suspended board (Mr. Her Seung Hwi and Mr. Hur Yoo Hae) and the statutory auditor (M/s. S. Kalyanaraman & Co. LLP) of the CD.

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8. It is stated that during the 4th CoC meeting dated 15.10.2021 the RP informed the position of the CIRP and non-availability details relating to assets, financial records, books of accounts etc., of the CD and suggested the process of liquidation since no EoI recieved. The CoC rejected the said suggestion and directed the RP to pursue the IA(IBC)/993(CHE)/2021. The Copy of the Minutes of 4th CoC is placed at Page 24 – 32 of the Application. 9. It is stated that the applicant filed an IA(IBC)/160(CHE)/2022 on 28.01.2022 for seeking exclusion of period from 10.09.2021 till disposal of IA(IBC)/993(CHE)/2021. 10. It is submitted that during 6th CoC meeting the issue of Paper Publication in Korea was discussed and RP was directed to file another application seeking permission for publishing notices to the suspended directors only in English Newspaper circulating in Korea in the matter of hearing co-operation application. Therefore IA(IBC)/586(CHE)/2022 in IA(IBC)/993(CHE)/2022 was filed on 04.04.2022 and same is allowed on 26.10.2022 by this Tribunal. 11. It is also submitted that, this Tribunal vide order dated 26.10.2022 dismissed the IA(IBC)/160(CHE)/2022 and recorded the non-satifsfactory performance of the RP as follows, ‘IA(IBC)/160(CHE)/2022 has been filed by the RP seeking extension of CIRP period with following prayers:- “It is therefore, respectfully prayed that the present application may kindly be allowed and the period w.e.f. 10.09.202 till the disposal of present application may kindly be excluded from the CIRP period of the Corporate Debtor Le, M/s You Seung Sang Sa India Construction Private Limited, which is going to expire on 05.02.2022."

From the above, it is seen that the present application is misconceived as it is not clear of the days to be excluded. RP has not mentioned about the number of days to be IA(IBC)/ 1908(CHE)/2023 IN IBA/796/2020 – Harsh Garg, RP In the matter of M/s. M/s. You Seung Sang Sa India Construction Private Limited 4 OF 12 excluded in the application and everything is left to the discretion of the Bench. Hence, this Application is disposed of. It is also seen that the period of 330-days has expired. Despite the completion of the period as specified under IBC, when no resolution plan was approved by the CoC so far, no application for liquidation has so far not been filed by the RP. This attitude of the Learned RP is not appreciated by this Bench. A copy of the order may be marked to IBBI for taking appropriate action against the RP. Similarly, we are surprised to find the attitude of CoC, despite knowledge of provisions of the Code, after expiry of 330-days of CIRP, if no plan is forthcoming, then the application for liquidation has to be moved. 12. It is submitted that 7th CoC meeting was conducted on 02.11.2022, wherein again the CoC were against the idea of Liquidation for the reason that the last balance sheet of the CD shows assets close to value of Rs.100 Crores.

The Copy of minutes of the 7th CoC meeting is placed at Page 33 – 37 of the Application. 13. It is submitted that the applicant has approached the NCLAT against the Order dated 26.10.2022 of this Tribunal passed in IA(IBC)/160(CHE)/2022. The said appeal was dismissed as withdrawn vide order dated 23.12.2022 directing the applicant to approach this Tribunal. So this applicant before this Tribunal moved an application IA(IBC)2070(CHE)/2023 seeking reliefs as follows, “that the present application may kindly be allowed and the order dated 26.10.2022 passed by this Hon’ble Tribunal may kindly be recalled/amended vide which the same has been marked to the Insolvency & Bankruptcy Board of India for taking appropriate action against the Resolution Professional, without appreciating the facts and circumstances of the case” 14. However said application was also dismissed by this Tribunal vide order dated 23.02.2024 thus giving the finality in respect of relief sought for exclusion of CIRP

IA(IBC)/ 1908(CHE)/2023 IN IBA/796/2020 – Harsh Garg, RP In the matter of M/s. M/s. You Seung Sang Sa India Construction Private Limited 5 OF 12 period starting from 10.09.2021 till the disposal of IA(IBC)/993(CHE)/2021 in respect of the CD. 15. It is submitted that during the 8th CoC meeting dated 30.01.2023, applicant proposed the CoC that Form G was published and no response received. Further 330 days deadline for CIRP in relation to the CD had also ended and no resolution plan was submitted, it would be best to liquidate the CD. The said proposal was accepted and voted in favour with 83.29%, thus permitting the Liquidator applicant to file the present application. The Copy of the 8th CoC meeting was placed at Page 40 – 50 of the Application. 16. The details relating to the Resolutions passed in respect of the present application are extracted as follows,

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17. It is submitted that the CoC had recommended the appointment of the applicant RP as the Liquidator in respect of the CD and fixed Rs.2,50,000/- per month as his remuneration. The voting of the CoC for the resolutions passed is extracted as follows,

18. We have heard the Ld. Counsel for the applicant and perused the documents on record. 19. It is observed that the CoC after a period of inordinate delay found no prospects in continuing with the CIRP. Therefore the resolution for Liquidation of the Corporate Debtor has been passed by the CoC directing the Resolution professional to file necessary applications for Liquidation of the Corporate Debtor. 20. The Applicant/RP submitted FORM-H as per Regulation 39 (4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016. The same is placed at Page 54 – 59 of the application. Further the applicant has filed convenience proforma dated 08.12.2023 which discuses about 4 valuers in connection to the CD. It also discloses some pending litigations and PUFE transaction applications connected to the CD.

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21. From the records it is apparent that the Applicant RP and CoC had not stick on with the timelines mandated by the code. The apathetic behaviour of both the RP and CoC is inappropriate and not appreciative. Even the same is recorded in the order of this Tribunal dated 26.10.2022 & 23.02.2024. 22. In the present matter no exclusion or extension has been granted after expiry of 180 days of the CIRP. Without obtaining any required permission of this Tribunal, even after the expiry of 330 days, maximum time limit provided under IBC no resolution plan was received. Only after passing order dated 26.10.2022, in 05.03.2023 the present application has been filed. 23. Section 33 of the Insolvency and Bankruptcy Code, stipulates as follows, “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 as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).” 24. In Arcelormittial India Pvt Ltd v. Satish Kumar Gupta ((2019) 2 SCC 1) it is observed as follows;- “76.10. As has been sated hereinbefore, the liquidation process gets initiated Under Section 33 if, (1) either no revolution plan is submitted within the time specified Under Section 12, or a revolution plan has been rejected by the adjudicating authority: (2) where the Resolution Professional, before conformation of the resolution plan, intimates the adjudicating authority of the decision of the Committee of Creditors to liquidate the corporate debtor; or (3) where the resolution plan approved by the adjudicating authority is contravened by the corporate debtor concerned. Any person other than the corporate debtor whose interests are prejudicially affected by such

IA(IBC)/ 1908(CHE)/2023 IN IBA/796/2020 – Harsh Garg, RP In the matter of M/s. M/s. You Seung Sang Sa India Construction Private Limited 9 OF 12 contravention may apply as the adjudicating authority, who may then pass a liquidation ender on such application.” 25. Similarly explaining the ambit of the cases covered under Section 33 (1) (i) and (ii), the Supreme Court in Manish Kumar v Union of India ([2021] 14 S.C.R. 895), observed as follows;- “Section 33, which is in Chapter III in Part II, compels announcing the death knell of the corporate debtor. That is if, before the expiry of insolvency resolution process period or the maximum period permitted which is CIRP Under Section 12, inter alia, a resolution plan is not received or though received is rejected by the adjudicating authority, then Under Section 33, order is to be passed. The curtains are wrung down on the insolvency resolution process. The corporate debtor goes into liquidation. The adjudicating authority is bound to pau an order requiring corporate debtor to be liquidated as provided in chapter 111 Part 11. Section 33(2) contemplates that before the confirmation of the resolution plan if the committee of creditors so approved by not less than 66% of the sating decide to liquidate the corporate debtor, the adjudicating authority is to pass the liquidation order.” 26. It is also noted from the minutes that the CoC has recommended Mr. Harsh Garg (Applicant herein) to act as the Liquidator of the Corporate Debtor. However IBBI vide its notification bearing No. Liq-12011/214/2023-IBBI/840 dated 18.07.2023 has recommended that the person other than IRP/RP of the Corporate Debtor to be appointed as the Liquidator in the case of liquidation the Corporate Debtor. Since no resolution plan was submitted by any person, CoC constrained to pass resolution for Liquidation of CD and passed by majority. Further CoC also recommended the name of the Applicant/ RP to be appointed as Liquidator. Therefore there is no impediment to appoint him as the Liquidator.

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27. From the above facts, circumstances and precedents, this Adjudicating Authority deems it fit to order Liquidation of the Corporate. Accordingly, we order liquidation of the Corporate Debtor (M/s. You Seung Sang Sa India Construction Private Limited) by appointing Mr. Harsh Garg having Reg. No. IBBI/IPA-001/IP- P00243/2017-18/10472 with active AFA status till 30.06.2025 (email address -gharsh.garg81@gmail.com) as the Liquidator to carry out the liquidation process subject to the following terms/directions: - a) The Liquidator shall strictly act in accordance with the provisions of IBC, 2016 and the attendant Rules and Regulations including Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017 as amended up to date enjoined upon him. b) The Liquidator shall issue the public announcement that the Corporate Debtor is in liquidation. In relation to officers/ employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge. c) The Liquidator shall investigate the financial affairs of the Corporate Debtor particularly, in relation to preferential transactions/ undervalued transactions and such other like transactions including fraudulent preferences and file a suitable application before this Adjudicating Authority. d) In terms of section 178 of the Income Tax Act, 1961, the Liquidator shall give necessary intimation to the Income Tax Department. In relation to other fiscal and regulatory authorities which govern the Corporate Debtor, the Liquidator shall also duly intimate about the order of liquidation. e) The order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and a fresh Moratorium under Section 33(5) of the Insolvency and Bankruptcy Code shall commence.

IA(IBC)/ 1908(CHE)/2023 IN IBA/796/2020 – Harsh Garg, RP In the matter of M/s. M/s. You Seung Sang Sa India Construction Private Limited 11 OF 12 f) The Liquidator is directed to proceed with the process of liquidation in a manner laid down in Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016. g) The Liquidator is directed to investigate the financial affairs of the Corporate Debtor in terms of the provisions of Section – 35(1) of IBC, 2016 read with relevant rules and regulations and also file its response for disposal of any pending Company Applications during the process of liquidation. h) The Liquidator shall submit individual Preliminary report to this Tribunal within 75 (seventy-five) days from the liquidation commencement date as per Regulation 13 of the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2016. Further such other or further reports as are required to be filed under the relevant Regulations, in addition, shall also be duly filed by him with this Adjudicating Authority. i) The Liquidator directed explore the possibilities of selling the Corporate Debtor as the going concern. j) Copy of this order be sent to the Creditors, Corporate Debtor and the Liquidator for taking necessary steps and for extending the necessary co-operation in relation to the Liquidation process of the Corporate Debtor, viz., Company-in-liquidation. 28. With the above directions, IA(IBC)/ 1908(CHE)/2023 in IBA/796/2020 stands allowed and disposed of. 29. The Registry is directed to communicate this order to the Registrar of Companies, Chennai and to the Insolvency and Bankruptcy Board of India.

-Sd/- -Sd/- RAVICHANDRAN RAMASAMY JYOTI KUMAR TRIPATHI MEMBER (TECHNICAL) MEMBER (JUDICIAL)

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