The NCLT has ordered the liquidation of a corporate debtor after the Committee of Creditors rejected the only resolution plan submitted during the Corporate Insolvency Resolution Process (CIRP).
Liquidation Ordered After CoC Rejects Sole Resolution Plan
The National Company Law Tribunal (NCLT) has ruled that the rejection of the sole resolution plan by the Committee of Creditors (CoC) necessitates the liquidation of the corporate debtor. This decision highlights the critical role of the CoC in the insolvency proceedings and the implications of their decisions on the fate of the debtor.
In this instance, the tribunal outlined how the rejection of the resolution plan left no viable alternatives for the rehabilitation of the corporate debtor, thus activating provisions under Section 33 of the Insolvency and Bankruptcy Code (IBC) that mandate liquidation in such scenarios. The order stresses the importance of robust and feasible proposals during the CIRP.
Legal practitioners should note the significance of resolution plan acceptance in the CIRP, as highlighted in this case. The ruling reinforces the urgent need for well-structured resolution plans to avoid escalation into liquidation proceedings.
Citations
- NCLT Chandigarh Bench (2026) NCLT Order 1446135
