Whether the accumulated cash profit presently lying in the bank account of the Corporate Debtor which are in excess of liquidation can be distributed by the liquidator the stakeholders u/s 53 subject to deduction of withholding tax as may be applicable, pending sale of assets forming part of liquidation estates and realisation Of proceeds thereof – Sri Supriyo Kumar Chaudhuri, Liq. for JVL Agro Industries Ltd. Vs. State Bank of India – NCLT Allahabad Bench
August 8, 2021
The Adjudicating Authority observed that Regulation 42 of the Liquidation Process Regulations, 2016 provides that the Liquidator can commence with the distribution once the list of stakeholders and asset memorandum have been filed with the Tribunal and in the present case, it is a matter of record that it has already been done and before this Tribunal. Further, since the corporate debtor in liquidation is not a going concern and assets which are to be distributed are in the form of liquid assets and are non saleable, thus this Adjudicating Authority is of the opinion that the Code does not bar such distribution as such distribution will not hamper the liquidation process of the Corporate Debtor.