The NCLT has ordered liquidation after the Resolution Applicant failed to furnish a mandatory Performance Bank Guarantee, rendering the resolution plan non-responsive.
NCLT Orders Liquidation for Non-Furnishing Performance Bank Guarantee
The National Company Law Tribunal (NCLT) has ordered the liquidation of a corporate debtor after the Resolution Applicant repeatedly failed to provide a mandatory Performance Bank Guarantee (PBG), which made the approved resolution plan non-responsive.
The Tribunal stressed the importance of compliance with procedural requirements, indicating that the absence of a PBG compromises the integrity of the resolution process. This ruling reinforces the necessity of adhering to all obligatory stipulations in order to maintain operational credibility.
The implications for legal practitioners are significant; it indicates the Tribunal’s strict approach towards non-compliance with resolution prerequisites, serving as a reminder to ensure all procedural requirements are met without fail.
Citations
- NCLT Order (2026) 3 NCLT 1
