NCLT Allows Liquidation Application filed by Ultratech Cement against Corporate Debtor citing 66.29 % of voting approval by CoC [Read Order]

In a recent case, the National Company Law Tribunal Mumbai Bench allowed the liquidation of corporate debtor Jaatvedas Construction Company Private Limited citing the 66.29 % of vote approval by CoC. The Corporate Insolvency Resolution Process (CIRP) application was filed under Section 9 of the Code by Ultratech Cement Limited, the Operational Creditor against the corporate debtor.

The Interlocutory Application(Liq.) was filed by Mr. Kailash T. Shah, the Resolution Professional (RP) of Jaatvedas Construction Company Private Limited, (“the Corporate Debtor”) under Section 33 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016, ( “the Code”) and Rule 11 of the National Company Law Tribunal Rules, 2016 (NCLT Rules), seeking order directing initiation of Liquidation Process of the Corporate Debtor in accordance with Chapter III of Part II of the Code along with appointment of Incorp Restructuring LLP (Registration No. IBBI/IPE0129/IPA-1/2022-23/50032), an Insolvency Professional Entity, as the Liquidator of the Corporate Debtor.

The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) vide order dated 16.09.2022 (Admission Order) passed by the Tribunal in CP(IB) No. 4563/MB/2019, filed under Section 9 of the Code by Ultratech Cement Limited, the Operational Creditor and Mr. Sitansh Magia was appointed as the Interim Resolution Professional (IRP) of the Corporate Debtor.

Pursuant to the admission order, the erstwhile IRP made a Public Announcement in Form-A on 17.09.2022 and the 1st Meeting dated 16.10.2022 of the Committee of Creditors (CoC) was held wherein the erstwhile IRP informed the CoC about his unwillingness to continue as the Corporate Debtor’s IRP pursuant to which the CoC appointed the Applicant as IRP of the Corporate Debtor in its 2nd Meeting.

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The Applicant/RP issued Form G - Invitation for Expression of Interest (EoI). He subsequently issued the revised Form-G for EoI for the Corporate Debtor on 20.12.2022. For completion of CIRP proceedings of the Corporate Debtor, the Applicant/RP sought extensions from time to time. The Tribunal, vide its order dated 18.04.2023 in IA(IBC) No. 1419/2023 and order dated 22.06.2023 in IA(IBC) No. 2616/2023, allowed the extension of 90 (Ninety) days from 16.03.2023 to 14.06.2023 and 60 (Sixty) days from 15.06.2023 to 14.08.2023 respectively.

Pursuant to the Tribunal’s aforesaid order, the Applicant/RP informed the CoC in its 24th meeting dated 03.03.2025 that the SRA had given the revised Resolution Plan on 22.02.2025 which was shared with the CoC members. However, the revised Resolution Plan of the SRA was rejected by the CoC by 66.29% voting in favour of rejection in the 24th CoC meeting held on 03.03.2025 and the same was communicated to the SRA as well as CoC members. Consequently, the SRA intimated the Applicant/RP about its withdrawal from the Corporate Debtor’s resolution process and requested for refunding the Earnest Money Deposit (EMD).

The CoC, in its 26th meeting dated 25.04.2025 approved the resolution to refund the EMD amount of Rs.2,00,00,000/- to the SRA as well as another resolution for liquidation of the Corporate Debtor and appointment of Incorp Restructuring Services LLP as its Liquidator with a majority of 53.99%.

The Applicant/RP has filed the present IA praying for initiation of liquidation process of the Corporate Debtor and appointment of Incorp Restructuring Services LLP as the Liquidator of the Corporate Debtor.

Counsel for the Applicant/RP. Section 33(2) of the Code lays down that where the resolution professional at any time during the CIRP but before confirmation of resolution plan intimates the Adjudicating Authority of the decision of the CoC approved by not less than 66% of the voting share to liquidate the Corporate Debtor, it shall pass an order requiring the Corporate Debtor to be liquidated in the manner as laid down in ChapterIII of Part-II of the Code; issue a public announcement stating that the Corporate Debtor is in liquidation and require the said order to be sent to the authority with which the Corporate Debtor is registered.

A two member bench of Ashish Kalia, Member (Judicial) and Sanjiv Dutt, Member (Technical) observed that the members of the CoC having 66.29% voting share have already approved the resolution to initiate liquidation of the Corporate Debtor and to appoint Incorp Restructuring Services LLP (Erstwhile M/s Vinay and Keshava Resolution Professionals LLP), IPE, as the Liquidator of the Corporate Debtor in its 25th and 26th meetings held on 04.04.2025 and 25.04.2025.

The bench held that “this is a fit case for initiation of liquidation of the Corporate Debtor in terms of Section 33(2) of the Code. Therefore, we hereby order the initiation of liquidation process of the Corporate Debtor.The Corporate Debtor, Jaatvedas Constructions Company Private Limited, is ordered to be liquidated in terms of the provisions of Section 33(1)(b) of the Code read with the relevant provisions of the IBBI (Liquidation Process) Regulations, 2016 made thereunder which shall be effective from the date of this order.”

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