Following the rejection of the only resolution plan by the Committee of Creditors, the NCLT has ordered the liquidation of the corporate debtor, highlighting procedural routes in insolvency.
NCLT Orders Liquidation After CoC Rejects Sole Resolution Plan
The NCLT Chandigarh Bench has mandated the liquidation of a corporate debtor after the Committee of Creditors (CoC) rejected the only resolution plan submitted during the Corporate Insolvency Resolution Process (CIRP). This decision underscores the limits of resolution attempts in the insolvency framework.
In its ruling, the NCLT noted that the rejection of the sole viable resolution plan effectively removes the option for a successful turnaround of the corporate debtor, thereby necessitating its liquidation under section 33 of the IBC. The Tribunal's judgment elucidates the role of the CoC in evaluating resolution plans and the critical impact of their decisions.
Legal practitioners should heed this ruling, as it illustrates the precarious nature of insolvency proceedings where the rejection of resolutions can swiftly lead to liquidation, altering the landscape for creditors and stakeholders alike.
Citations
- NCLT Order (2026) Chandigarh Bench
