NCLT orders liquidation after zero resolution applicants emerge and assets are valued at nil. Sole creditor consents, triggering shift from CIRP to liquidation under IBC.
NCLT Orders Liquidation of Firm with Nil Assets, No Resolution Interest
The National Company Law Tribunal (NCLT) has ordered the liquidation of a corporate debtor following the failure of the Corporate Insolvency Resolution Process (CIRP). No resolution applicants emerged during the bidding process, and the resolution professional’s report confirmed that the company’s assets were valued at nil.
The liquidation was approved by the sole financial creditor, satisfying the consent requirement under Regulation 33(1)(c) of the CIRP Regulations. The NCLT held that, in absence of any viable resolution plan and given the lack of recoverable assets, continuation of CIRP would serve no purpose. The tribunal invoked Section 33(1) of the Insolvency and Bankruptcy Code, 2016, to pass the liquidation order.
This case illustrates the procedural pathway from failed CIRP to liquidation, particularly in asset-stripped or non-operational entities. Practitioners must ensure timely monitoring of asset realization potential and creditor communication, especially in single-creditor scenarios where consent can streamline the liquidation process.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 33(1)
- CIRP Regulations, Regulation 33(1)(c)
