NCLT directs Liquidation u/s 33 of IBC in absence of Resolution Plan even after Extending Time Period [Read Order]

The Kolkata bench of the National Company Law Tribunal (NCLT) directed the liquidation under section 33 of Insolvency Bankruptcy Code (IBC), 2016 in absence of Resolution Plan even after extending the time period.

he tribunal ordered the liquidation of Shomuk Consultancy Services Private Limited, the Corporate Debtor and Mr. Mahesh Chand Gupta is appointed as Liquidator.

Shomuk Consultancy Services Private Limited, filed an application to pass an order requiring the corporate debtor to be liquidated in the manner as laid down in Chapter III as provided under Section 33 of the Insolvency and Bankruptcy Code, 2016; and Appointment of Mr. Mahesh Chand Gupta as the Liquidator of the CD.

Corporate Insolvency Resolution Process (CIRP) was initiated upon the Corporate Debtor. Vide the said order dated 11th June, 2024, the Applicant was appointed as the Interim Resolution Professional (IRP). In Compliance of Sections 13 and 15 and other applicable provisions of the Insolvency and Bankruptcy Code, 2016 read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016, the applicant made Public Announcement in Form-A on 13th June, 2024 in Financial Express (English) and Ekdin (Bengali), Kolkata newspapers.

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In terms of Regulation 6A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate persons) Regulations, 2016, the Applicant published Form G on 10th August, 2024, 7th September, 2024 and 9th December, 2024 in which corrigendum of Form G was issued on 14th September, 2024 and the last date of submission of Expression of Interest (EOI) was 25th August, 2024, 14th September, 2024 and 24th December, 2025.

No resolution plan was received till the date of filing of this application. The COC did not find it feasible to keep on reissuing of Form G and wanted the Corporate Debtor to go into liquidation directly, as had the CIRP process, if continued, would have only increased the CIRP cost without any fruitful outcome which would have ultimately created a burden on the stakeholders.

An application under Section 12 (2) of the Insolvency and Bankruptcy Code, 2016 was filed before this Tribunal for the extension of the CIRP by another 90 days to maximize the interest of the Stakeholders. The said application was heard and order was passed on 11th December, 2024 approving the extension of the CIRP process by 90 days.

Pursuant to the extension received by way of an order dated 11th December, 2024, the CIRP was scheduled to end on 8th March, 2025. Accordingly, the 10th COC meeting was conducted on 6th March, 2025 and the applicant had duly informed the COC members about the CIRP closure date and requested tem to decide whether the members wanted to go for liquidation in terms of the Insolvency and Bankruptcy Code, 2016 as there is no Resolution Plan.

The applicant was informed by the sole COC member being M/s. Aditya Birla Finance Limited that they are in process of a mutual settlement with Mr. Aniruddha Banerjee being the Suspended Board of the Corporate Debtor and they are almost under the conclusive stage.

Since the same is pending for approval from the higher management of Aditya Birla Finance Limited, the COC had requested the applicant to seek exclusion-cum-extension for a period of 45 days from the CIRP period , which was allowed.

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An application was also filed by the Applicant challenging the fraudulent transactions carried out by the respondents for the purpose of defrauding the creditors of the corporate debtor and in order to unjustly enrich themselves at the expenses of the corporate debtor.

The Applicant was required to approach the Tribunal within 130 days from the insolvency commencement date, the Applicant was unable to do so in view of non-cooperation on the part of the suspended board in regard to furnishing of documents and information necessary to enable the applicant to form an opinion and determination as to whether any avoidance transactions have been carried out in respect of the corporate debtor. The delay that has occurred is for reasons solely attributable to the suspended board and for reasons completely beyond the control of the Applicant.

Snce there is no resolution plan received within the maximum permissible CIRP period and moreover their decision for mutual settlement between the Suspended Board and the Financial Creditor has been officially dropped and the last date for the conclusion of the CIRP granted by Tribunal is 22nd April, 2025.

However, the COC stated through e-voting that no decision is currently required to be taken to sell the company as per Regulation 32E or 32F of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The resolution was also taken and recorded in the 12th CoC meeting held on 19th April, 2025 and it was also decided by the CoC to take decision and approval on the appointment of the liquidator if CoC decides to liquidate the company under Section 33.

The two member bench of Bidisha Banerjee, Member (Judicial) and Siddharth Mishra, Member (Technical) found that the statutory period for the CIRP has been exhausted, and no resolution plan has been received, therefore, applicant after the approval of the COC member prefers to file an application under section 33 (1) (a) as decided by the CoC, l seeking an order requiring the Corporate Debtor to be liquidated.

The tribunal ordered the liquidation of Shomuk Consultancy Services Private Limited, the Corporate Debtor and Mr. Mahesh Chand Gupta is appointed as Liquidator.

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