NCLT directed liquidation of a corporate debtor after approval by 91.75% of the Committee of Creditors (CoC), declining to appoint the Resolution Professional (RP) as liquidator under amended IBC provisions.
NCLT Orders Liquidation on 91.75% CoC Approval, Rejects RP as Liquidator
The National Company Law Tribunal (NCLT) has ordered the liquidation of a corporate debtor following approval by 91.75% of the Committee of Creditors (CoC), after the conclusion of a failed Corporate Insolvency Resolution Process (CIRP) that did not yield an approved resolution plan. The tribunal declined to appoint the existing Resolution Professional (RP) as the liquidator, relying on the amended provisions of the Insolvency and Bankruptcy Code (IBC) introduced through the IBC (Amendment) Act, 2025.
Under the amended framework, the RP is not automatically entitled to appointment as liquidator. The NCLT emphasized the need for transparency, independence, and adherence to eligibility criteria under Regulation 30 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The tribunal observed that automatic appointment could result in conflict of interest, particularly if the RP had been involved in procedural lapses during CIRP.
Practitioners should note that the decision reinforces the discretion of tribunals in appointing liquidators, even in cases with overwhelming CoC support for liquidation. The ruling underscores compliance with post-amendment procedural safeguards and may influence future appointments under the IBC regime.
Citations
- Insolvency and Bankruptcy Code, 2016, as amended
