The NCLT has ordered liquidation of a corporate debtor with no resolution applicants, nil asset valuation, and approval from the sole creditor. The decision marks the end of the CIRP process.
NCLT Orders Liquidation Due to No Resolution and Zero Assets
The National Company Law Tribunal (NCLT) has directed the liquidation of a corporate debtor under Section 33(1)(c) of the Insolvency and Bankruptcy Code (IBC) after no resolution applicants emerged during the CIRP, and the company’s assets were valued at nil by the resolution professional.
The sole operational creditor consented to liquidation, recognizing the absence of recoverable assets. The NCLT noted that continuation of the resolution process would be futile and prejudicial to timely resolution, a key objective under the IBC. The order invoked the tribunal’s power to liquidate when no viable resolution plan is received.
This case illustrates the finality of the CIRP timeline and the consequences of zero asset realization. For insolvency professionals, it highlights the need for early asset identification. Practitioners should advise creditors to assess recovery prospects realistically and consider early transition to liquidation when assets are negligible.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 33(1)(c)
