Case Note & Summary
The appeal arose from an order of the National Company Law Tribunal (NCLT) directing the liquidation of Syska E-Retails LLP after the Corporate Insolvency Resolution Process (CIRP) period expired without an approved resolution plan. The CIRP commenced on 17.06.2025 following a petition by Canara Bank, leading to the appointment of a Resolution Professional (RP). Despite attempts to extend the CIRP period and receive compliant resolution plans, the resolutions failed to secure the necessary 66% votes in the Committee of Creditors (CoC), resulting in a deadlock. The NCLT subsequently ordered liquidation on 08.01.2026, citing the expiry of the CIRP period and lack of an approved resolution plan. The Appellant, a suspended partner of the Corporate Debtor, contended that there were ongoing prospects for resolution, supported by expressions of interest received after the failed voting. However, the Respondents argued that the statutory framework mandated liquidation once the CIRP period expired without an approved plan. The Appellate Tribunal upheld the NCLT's decision, emphasizing that the absence of a resolution plan and the failure to extend the CIRP period necessitated liquidation, and that subsequent expressions of interest could not revive the process. The Tribunal concluded that the statutory mandate under the Insolvency and Bankruptcy Code, 2016, left no discretion for the Adjudicating Authority in such circumstances.
Headnote
A) Insolvency Law - Liquidation Order - Statutory Mandate - Insolvency and Bankruptcy Code, 2016, Section 33(1)(a) - The Adjudicating Authority was bound to order liquidation upon expiry of the CIRP period without an approved resolution plan, as per statutory requirements. The court held that the absence of a resolution plan and the failure to extend the CIRP period mandated liquidation (Paras 10, 47-48). B) Committee of Creditors - Voting Threshold - Insolvency and Bankruptcy Code, 2016, Section 30(4) - The resolutions for extension of the CIRP and for liquidation failed to meet the required 66% voting threshold, resulting in a deadlock. The court emphasized that without a valid resolution, the process could not continue (Paras 27, 61-62). C) Expressions of Interest - Revival Potential - Insolvency and Bankruptcy Code, 2016, Section 240A - Subsequent expressions of interest from prospective resolution applicants do not revive the CIRP once the statutory period has lapsed. The court noted that such interests cannot substitute the requirement for a resolution plan within the prescribed timeframe (Paras 33, 62).
Issue of Consideration
Whether the Adjudicating Authority could defer liquidation after the expiry of the CIRP period without a resolution plan and without a valid extension.
Final Decision
The Appellate Tribunal upheld the NCLT's order for liquidation, affirming that the expiry of the CIRP period without an approved resolution plan necessitated liquidation under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Corporate Insolvency Resolution Process
- Liquidation
- Committee of Creditors
- Resolution Plan
- Voting Threshold
