NCLT ordered liquidation of a corporate debtor after resolution applicants failed to emerge and the company’s assets were valued at nil, with the sole financial creditor approving the move.
NCLT Orders Liquidation in Absence of Resolution Plans, Nil Asset Valuation
The National Company Law Tribunal (NCLT) has directed the initiation of liquidation proceedings under Section 33(1) of the Insolvency and Bankruptcy Code (IBC), 2016, after no resolution applicants emerged during the corporate insolvency resolution process (CIRP). The corporate debtor’s assets were appraised at nil value, and the sole financial creditor consented to liquidation.
The adjudicating authority observed that the resolution professional had conducted due diligence and publicly invited expressions of interest in accordance with Regulation 36 of the CIRP Regulations. Despite these efforts, no viable resolution plans were submitted. The final asset valuation report confirmed that the company possessed no recoverable assets, rendering revival unfeasible.
"In the absence of any resolution applicant and with assets valued at zero, the object of revival under IBC cannot be achieved,"
The tribunal approved the liquidation based on the creditor’s approval and the futility of prolonging the insolvency process. This outcome highlights the practical limits of the IBC’s rehabilitation framework when enterprises lack economic viability. For practitioners, the ruling emphasizes the necessity of early asset verification and proactive stakeholder engagement to avoid protracted, fruitless proceedings.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 33(1)
- IBC Regulation 36
