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 (IBC). 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 NCLT's order indicated that the CoC, after reviewing the plans, decided that none maximized the value of the Corporate Debtor, leading to a unanimous decision to initiate liquidation. The NCLAT upheld the NCLT's decision, stating that the Resolution Professional acted within his rights by not presenting the non-compliant plan to the CoC. The court noted that the liquidation was warranted as no compliant resolution plan was received. The appeal was dismissed, and the liquidation process was ordered to proceed as per the IBC regulations.
Headnote
A) Insolvency Law - Liquidation Process - Compliance of Resolution Plans - Insolvency and Bankruptcy Code, 2016, Sections 30(2), 30(3), 33(1) - 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 appeal was dismissed as the liquidation process was deemed necessary due to the lack of a compliant resolution plan (Paras 6-10).
Issue of Consideration
Whether the Resolution Professional acted appropriately in rejecting the Appellant's resolution plan and initiating liquidation proceedings.
Final Decision
The NCLAT dismissed the appeal, upholding the NCLT's order for liquidation of the Corporate Debtor, stating that the Resolution Professional acted within his rights in rejecting the non-compliant resolution plan.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Liquidation process
- Resolution plan compliance
- Committee of Creditors
- Adjudicating Authority powers
