Authority: National Company Law Tribunal (NCLT), Amaravati Bench

Order Date: 08 July 2026

Case Overview

This order pertains to an Interlocutory Application (IA(IBC)(Dis)/1/2026) filed by the Resolution Professional (RP), Mr. R. Hari Prasad, for the corporate debtor, Coastal Automobiles Private Limited. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 11 of the NCLT Rules, 2016, seeking: (i) orders for dissolution of the Corporate Debtor, (ii) discharge of the RP from his duties, and (iii) any other orders deemed fit.

The corporate insolvency resolution process (CIRP) against Coastal Automobiles was initiated on 09.11.2021 based on a petition (CP(IB)/07/7/AMR/2020) filed by financial creditor PPG Asian Paints Pvt Ltd for a default of ₹4,00,000. The company was admitted into CIRP, but the initially appointed Interim Resolution Professional (IRP), Mr. K.K. Balasubramanian, failed to initiate the process. Consequently, the current applicant, Mr. R. Hari Prasad, was appointed as IRP on 10.10.2025 to conduct the CIRP.

Upon his appointment, the RP made a public announcement and received claims from two financial creditors—State Bank of India (SBI) claiming ₹37,53,65,283.74 and PPG Asian Paints claiming ₹17,18,080 (of which ₹9,96,789 was admitted)—and three operational creditors: EPFO (₹1,72,248 admitted), Income Tax Office (₹16,14,41,055 admitted), and ESIC (₹6,17,2271 claimed, ₹1,62,575 admitted). The total admitted financial debt was ₹37,63,62,072.74, and operational debt was ₹16,17,75,878. All claims were classified as unsecured.

The RP's investigation revealed that the corporate debtor had been non-operational for the past 10 years. The last available audited financial statement was for FY 2012-13, which showed total assets of ₹27.82 crore. Physical visits to the registered office in Rajahmundry and branch locations in Tadepalli Gudem and Kakinada confirmed that no office, assets, or records existed at these addresses. The promoters/directors, Mr. Suresh Babu Battineedi and Mrs. Vara Lakshmi Battineedi, were untraceable, with neighbours confirming they had vacated their premises over a decade ago.

The Committee of Creditors (CoC), comprising SBI (99.74% voting share) and PPG (0.26% voting share), was constituted. In its second meeting on 18.12.2025, the CoC, considering the absence of any assets and the untraceability of directors, passed a resolution with 100% voting share to seek direct dissolution of the corporate debtor instead of a futile liquidation process. The RP filed the present application based on this resolution.

The tribunal issued bailable warrants against the suspended directors through the local police. The Superintendent of Police, East Godavari, reported that despite efforts, the directors could not be traced, as they had not resided at the given address for the last 10 years, and automobile showrooms now operated from the company's former locations.

The RP cited judicial precedents from NCLT Bengaluru, NCLT New Delhi, NCLAT Chennai, and NCLT Kolkata, where dissolution was ordered in similar circumstances of defunct companies with no assets. The application was also considered in light of the recent IBC Amendment Act, 2026, specifically Sections 33 and 54, which provide a framework for dissolution during CIRP based on a CoC decision.

Final Outcome

The NCLT Amaravati Bench allowed the application and ordered the dissolution of Coastal Automobiles Private Limited with immediate effect. The final ruling includes the following directions:

1. The Financial Creditors (SBI and PPG) are to reimburse the unpaid CIRP costs of ₹3,79,480 in the ratio of their voting share (SBI 99.74%, PPG 0.26%), after adjusting an advance already paid by PPG.

2. The RP is directed to file a memo with the NCLT registry within seven days, confirming receipt of the CIRP costs and the closure of the CIRP bank account (No. 44605193064 with Standard Chartered Bank, Hyderabad).

3. Upon filing the memo, Mr. R. Hari Prasad stands discharged from his duties as RP.

4. Liberty is granted to SBI to file appropriate applications for avoidance of transactions or fraudulent trading against the suspended directors if they are ever traced.

5. If any assets of the corporate debtor are found after dissolution, they shall be disposed of as per the proviso to Section 54(2A) of the IBC, with proceeds used for CIRP costs and any surplus credited to the Insolvency and Bankruptcy Fund.

6. The Financial Creditors shall make arrangements for pursuing any pending legal proceedings against the corporate debtor and distributing proceeds.

7. The dissolution does not absolve the liability of corporate or personal guarantors.

8. The promoters/directors are not absolved of their liabilities under any law.

9. The RP must serve a copy of the order to the Registrar of Companies, Andhra Pradesh, and forward it to the CoC members, IBBI, and other concerned statutory authorities.

10. The registry is to forward a copy of the order to the IBBI for noting the conduct of the former IRP, Mr. K.K. Balasubramanian (IBBI/IPA-001/IP-P-01544/2018-2019/12401), who failed to perform his duties, for necessary action.

11. The RP must preserve all records related to the CIRP for at least eight years.

Consequently, the main company petition (CP(IB)/07/7/AMR/2020) also stands disposed of.

Topics: Corporate Insolvency, NCLT Order, Company Dissolution