NCLAT Dismisses Appeals Against Liquidation Extension and Trustee’s Continuation Beyond Age 70 [Read Order]

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT), Chennai, dismissed two appeals filed by the appellant, a former director and personal guarantor of Sri Ananda Lakshmi Narasimha Industries India Pvt Ltd., challenging the extension of the company’s liquidation period and the continuation of its bankruptcy trustee beyond the age of 70.

The appellant Chavva Naga Sampathi Tayaru argued that the Amaravati Bench of the NCLT had exceeded its powers under Regulation 44(2) of the IBBI (Liquidation Process) Regulations, 2016 by granting a one‑month extension from April 18 to May 17, 2026 after an earlier four‑month extension had already expired. He further contended that the liquidator, having crossed 70 years, was disqualified under Regulation 7A of the IBBI (Insolvency Professionals) Regulations, 2016.

The appellate bench, comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member), rejected both arguments. It noted that the extension was validly approved by the Stakeholders’ Consultation Committee (SCC), where members representing 35.57 % voting rights participated, exceeding the statutory quorum of 33 % under Regulation 22(1) of the IBBI (IRP for Corporate Persons) Regulations, 2016.

On the age‑limit issue, the tribunal clarified that the proviso (b) to Regulation 7A expressly allows insolvency professionals to complete assignments already undertaken before expiry of their authorization. So, the bankruptcy trustee could lawfully continue despite turning 70.

The tribunal observed that the one‑month extension had already lapsed by the time of hearing and that “any interference would serve no purpose.” and “the passing of the impugned order on the basis of the aforesaid interpretation to the proviso to Regulation 7A(b) of the Regulations, 2016, doesn’t suffer from any apparent legal or factual error, which could call for any interference”.

Accordingly, it concluded that both appeals lacked merit and dismissed them, closing all pending applications.

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