The New Delhi Bench of the National Company Law Tribunal (NCLT) has clarified that where no resolution plan is approved by the requisite 66% voting share of the CoC within the prescribed CIRP period, including extensions, liquidation must follow under Section 33(1)(a) of the IBC. The NCLT held that once the CIRP period expires without an approved resolution plan, a separate CoC resolution approving liquidation by 66% voting share is not required for the Adjudicating Authority to order liquidation under Section 33(1)(a).
The Division Bench comprising Bachu Venkat Balaram Das (Judicial Member) and Reena Sinha Puri (Technical Member) observed that the statutory trigger under Section 33(1)(a) of the IBC is the non-approval of a resolution plan within the prescribed CIRP period. Page 6 It noted that despite multiple rounds of Form-G, receipt of resolution plans, negotiations, and re-voting under Regulation 39(3B), no plan secured the requisite 66% voting share before expiry of the CIRP period, including all extensions, on February 13, 2026.
The Tribunal expressly observed that a separate resolution of the CoC approving liquidation by 66% voting share is not a pre-condition for ordering liquidation under Section 33(1)(a) once the CIRP period has expired without approval of a resolution plan. It held that continuation of CIRP in such circumstances would serve no useful purpose and would only perpetuate deadlock, thereby defeating the time-bound object of the IBC.
Accordingly, the Tribunal ordered liquidation of the Corporate Debtor under Section 33(1)(a) read with Section 60(5) of the IBC. It also held that pending interlocutory applications seeking admission of claims and condonation of delay had become infructuous, while leaving it open to claimants to submit claims before the Liquidator in terms of Regulations 16 to 20 of the Liquidation Process Regulations, 2016.
The Tribunal appointed Lekhraj Bajaj as Liquidator from the IBBI panel, relieved the existing RP from his assignment, directed handover of records and control, and recorded that the moratorium under Section 14 would cease and a fresh moratorium under Section 33(5) would commence.
Briefly, an application under Section 33(1) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 was filed by the Resolution Professional, Bhoopesh Gupta, seeking initiation of liquidation proceedings against M/s Hero Electric Vehicles Pvt Ltd. The CIRP of the Corporate Debtor had commenced on December 20, 2024 pursuant to a Section 9 application filed by the Operational Creditor, M/s Metro Tyres Limited, and the Applicant was first appointed as IRP and thereafter confirmed as RP.
Pursuant to commencement of CIRP, public announcement was made, claims were invited, and the Committee of Creditors was constituted and later reconstituted upon admission of additional claims from two financial creditors. The reconstituted CoC consisted of six financial creditors, including Bank of Baroda, Kotak Mahindra Bank Ltd., IDFC First Bank Ltd., Karnation Fund acting through Mitcon Credentia Trusteeship Services Limited, South Indian Bank Ltd., and SLK Software Pvt Ltd.
In the CIRP, the CoC approved eligibility criteria for prospective resolution applicants and timelines for invitation of resolution plans, after which Form-G dated February 18, 2025 was issued and published. In the third CoC meeting, the RP informed the CoC that certain transactions appeared to be avoidable/fraudulent, a Transaction Auditor was appointed, and thereafter a Determination Report dated August 04, 2025 identified certain transactions as fraudulent under Section 66(1) of the Code, leading to filing of application, which remained pending.
During the first round, only one resolution plan was received, whereupon the CoC resolved to annul the earlier process, re-issue Form-G, and seek a 90-day extension, which was granted. Thereafter, a fresh Form-G was issued, three EOIs were received, two resolution plans were ultimately submitted, and extensions of 60 days each were granted as the CIRP period was nearing expiry. In the eleventh CoC meeting, both resolution plans were put to e-voting but failed to secure the requisite 66% voting share, with the highest voted plan receiving only 47.66% support.
The highest-voted plan was again placed for voting in the fourteenth CoC meeting under Regulation 39(3B), but again failed to obtain the statutory majority. In the fifteenth and sixteenth CoC meetings, neither liquidation nor approval of a resolution plan could secure the requisite 66% voting share. The CoC thus remained completely deadlocked, with approximately 50% voting share supporting a resolution plan and the remaining members favouring liquidation, while the CIRP period expired on February 13, 2026 without any fresh Form-G or further extension being approved.
Appearances:
Advocates Vishal Hirawat and Abhishek Devgan, for the Applicants
NA, for the Respondents
