Following a majority vote by SBI to reject all resolution plans, the NCLT has declared liquidation mandatory under Section 33(2) of the IBC and appointed a liquidator to oversee the process.
Mandatory Liquidation Declared by NCLT After SBI Rejection
The National Company Law Tribunal (NCLT) has declared that liquidation of the corporate debtor is mandatory under Section 33(2) of the Insolvency and Bankruptcy Code (IBC) after the State Bank of India (SBI) exercised its majority vote to reject all submitted resolution plans. Subsequently, the NCLT appointed a liquidator to manage the liquidation proceedings.
This decision highlights the critical role that creditors play in the corporate insolvency process. The NCLT's order also includes a fresh moratorium, ensuring protection for the assets involved during the liquidation period. A preliminary report from the liquidator is expected within 75 days to provide a clearer picture of the financial state of affairs.
The NCLT remarked, "The rejection of all resolution proposals necessitates a collective approach towards liquidation, safeguarding stakeholder interests."
Citations
- NCLT Order (2026) 2 NCLT 1
