Failure to Implement Approved Resolution Plan Amounting to Contravention: NCLT Orders Liquidation of Agrotech Pvt. Ltd. u/s 33 IBC [Read Order]

The National Company Law Tribunal (NCLT), Chandigarh Bench, has ordered the liquidation of J.R. Agrotech Private Limited under Section 33 of the Insolvencyand Bankruptcy Code, 2016, after finding that the approved resolution plan was contravened due to the failure of the successful resolution applicant to implement its obligations.

The application was filed by  Applicant, Mohit Chawla, Monitoring Agent and former Resolution Professional, seeking liquidation under Sections 33(3) and 33(4) of the Code.

The insolvency proceedings began in 2018 when Oriental Bank of Commerce initiated a Corporate Insolvency Resolution Process (CIRP) against the debtor. A Committee of Creditors (CoC) was formed, comprising major banks including State Bank of India, Canara Bank, IDBI Bank, UCO Bank, Union Bank of India, and Punjab National Bank, with total admitted claims exceeding ₹312 crore.

After evaluation of resolution plans, the CoC approved Compact Capital Limited’s plan worth ₹46 crore, with an upfront payment of ₹33.5 crore scheduled in instalments between April and October 2025.

After multiple notices and formal intimation, the successful applicant failed to pay even the first instalment of ₹15.2 crore due by 26 April 2025 and did not attend any Monitoring Committee meetings. The Monitoring Agent consequently forfeited the ₹1 crore performance guarantee and sought liquidation.

During the hearing, counsel for Compact Capital Limited stated that the company had no objection to liquidation, effectively conceding non‑compliance.

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The Bench comprising Judicial Member  Khetrabasi Biswal and Technical Member  Shishir Agarwal held that the resolution applicant had “miserably failed” to fulfil its obligations. Citing the Supreme Court’s rulings in State Bank of India v. Murari Lal Jalan & Florian Fritsch and Kalyani Transco v. Bhushan Power & Steel Ltd.,

The order noted that continued delay would defeat the purpose of the CIRP and that timely liquidation was preferable to an “endless resolution process.” The tribunal appointed Gurdev Bassi as Liquidator, directing him to take control of all assets, issue a public announcement, and file a preliminary report within 75 days.

Accordingly, all powers of the company’s board and management were suspended, and a fresh moratorium under Section 33(5) of the Code was imposed.

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