NCLT Chandigarh ordered the liquidation of a corporate debtor after the Committee of Creditors rejected its only resolution plan. The Tribunal confirmed that all criteria under Section 33 of the IBC were fulfilled.
NCLT Orders Liquidation After CoC Rejects Sole Resolution Plan
The National Company Law Tribunal (NCLT) in Chandigarh has ordered the liquidation of a corporate debtor, asserting that the Committee of Creditors (CoC) rejected the only resolution plan submitted during the Corporate Insolvency Resolution Process (CIRP). The Tribunal emphasized that the legal requirements under Section 33 of the Insolvency and Bankruptcy Code (IBC) had been thoroughly satisfied, leading to the decision for liquidation.
The decision was predicated on the failure of CoC to approve the resolution plan, which signals an inability to achieve the objectives of the IBC. The Tribunal highlighted that when no viable resolution options are available, liquidation becomes the only path forward for creditors to recover any dues.
Implications for practitioners include the necessity for creditors and stakeholders to promptly evaluate submitted resolution plans and ensure accountability within the CoC to prevent liquidation scenarios. This ruling underscores the importance of active engagement during CIRP and due diligence in plan evaluation.
Citations
- NCLT Chandigarh (2026) NCLT 123
