Case Note & Summary
The appeal was filed by Labh Capital Services Ltd. against an order of the National Company Law Tribunal (NCLT) allowing an application for liquidation of Asis Corporate Advisors Ltd. The NCLT had previously admitted the Corporate Insolvency Resolution Process (CIRP) on 09.09.2025, and the liquidation order was passed on 13.05.2026. The Appellant, along with two other Prospective Resolution Applicants (PRAs), submitted a resolution plan which was ultimately rejected by the Resolution Professional on grounds of non-compliance with the Insolvency and Bankruptcy Code, 2016. The Appellant contended that their plan was not presented to the Committee of Creditors (CoC) for voting, which they argued was a procedural error. The CoC, however, unanimously approved the liquidation of the Corporate Debtor after determining that the submitted plans did not maximize value. The court found that the Resolution Professional acted within his rights and that the liquidation process was validly initiated. The appeal was dismissed, and the order of liquidation was upheld.
Headnote
A) Insolvency Law - Liquidation Process - Compliance of Resolution Plans - Insolvency and Bankruptcy Code, 2016, Section 30(2) - The Resolution Professional was justified in not placing the Appellant's resolution plan before the Committee of Creditors as it was found non-compliant with the provisions of the Code. The Committee of Creditors resolved to liquidate the Corporate Debtor based on the non-compliance of the submitted plans. Held that the liquidation process was initiated correctly (Paras 6-10).
Issue of Consideration
Whether the Resolution Professional acted within his rights in not placing the Appellant's resolution plan before the Committee of Creditors.
Final Decision
The appeal was dismissed, and the order for liquidation of the Corporate Debtor was upheld. The Liquidator was appointed to proceed with the liquidation process as per the provisions of the IBC.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- liquidation process
- resolution plan compliance
- Committee of Creditors
- voting rights
