TaxTMI 
TaxTMI 
2026 (10) TMI 129
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....d 08.01.2026 (Impugned Order) passed by the Ld. National Company Law Tribunal, Mumbai Bench (I), in IA(I.B.C)/74/MB/2026 in C.P. (IB) No. 548/MB/2024, whereby the Adjudicating Authority has, upon expiry of the Corporate Insolvency Resolution Process (CIRP) period, ordered liquidation of the Corporate Debtor, M/s Syska E-Retails LLP, under Section 33(1) of the IBC and appointed the erstwhile Resolution Professional, Mr. Vijay Pitamber Lulla, as Liquidator. Submissions of the Appellant 2. Corporate Debtor was facing financial distress and defaults towards its creditors. The CIRP commenced on 17.06.2025, on the admission of the Section 7 petition filed by Canara Bank. Respondent No. 1 was appointed as Interim Resolution Professional and thereafter confirmed as Resolution Professional. Subsequently, Claims of three Financial Creditors were received and consequently a three-member Committee of Creditors was constituted comprising Canara Bank, State Bank of India and UV Asset Reconstruction Company Ltd. Form A and thereafter Form G were duly published on 19.06.2025 and 20.08.2025 respectively, inviting claims and Expressions of Interest. However, though two Prospective Resolution A....
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....portunity to submit a resolution plan for revival of the Corporate Debtor. (b) An email dated 19.12.2025 from Mr. Heemanshu Shah sought to submit a resolution plan and requested EOI details. 7. These communications established that resolution interest was alive and concrete even after the unsuccessful e-voting on the 7th CoC resolutions. In view of the continuing deadlock and fresh resolution interest, the RP issued a notice for the 8th CoC meeting on 26.12.2025 (later adjourned to 29.12.2025) with a specific agenda to consider: (i) The new EOIs, including that of the erstwhile management; (ii) The question of issuing a fresh Form G; and (iii) The future course of action in CIRP, including approaching the Adjudicating Authority for directions on extension versus liquidation. 8. The 8th (adjourned) CoC meeting was held on 29.12.2025, wherein it had unanimously passed a resolution authorising the RP to approach the Hon'ble NCLT to seek appropriate directions regarding the way forward, including extension of CIRP with issuance of fresh Form G or, in the alternative, liquidation. Thereafter RP filed IA(I.B.C)/74/MB/2026 on 03.01.2026 seekin....
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....to the object and scheme of the IBC, which assigns priority to resolution and value maximisation over liquidation. 12. The impugned order directing liquidation under Section 33(1) of IBC contravenes the unanimous resolution passed in the 8th CoC Meeting held on 29.12.2025, wherein the CoC expressly authorised the RP to approach the Tribunal for directions on extension of CIRP with fresh Form G publication, thereby usurping the CoC's commercial wisdom, which is beyond judicial interference save perversity. 13. Learned NCLT subverted IBC Preamble's explicit "resolution process" primacy and economic revival object by mechanically applying expiry sans resolution plan, disregarding CoC deadlock/EOIs enabling going-concern maximisation u/s. 5(26). 14. Learned NCLT's censure of RP for convening 8th CoC post-expiry ("no power") is inconsistent with entertaining RP's consequent IA and appointing RP Liquidator, vitiating order rationale and ignoring diligence in fostering consensus required as per Section 33(2). 15. Impugned directions lifting moratorium, vesting all powers in Liquidator, prohibiting proceedings u/s. 52, and prioritising Reg. 32A sales irreversibl....
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....radigm (IBC Preamble) by enforcing terminal liquidation amid CoC tripartite schism and viable prospects, flouting imperative for extensions in impasses and maximisation duty per Committee of Creditors. o K. Sashidhar v. Indian Overseas Bank [(2019) 12 SCC 1] and procedural sanctity of Reg. 24(6) IBBI (CIRP) Regulations: Adjudicating Authority's validation of SBI's post-facto email retraction (01.01.2026) over the 8th CoC's recorded unanimous resolution; corroborated by minutes and audio, effectively countenances a solitary creditor's veto to emasculate collegial CoC decision-making under S.21(8) IBC, impermissibly diluting the "commercial wisdom" doctrine Submissions of Respondent No. 3/Canara Bank 18. The decision-making process within the Committee of Creditors ("CoC") had remained inconclusive. The record demonstrates that neither the resolution for extension of the CIRP period nor the resolution for liquidation secured the requisite voting threshold of 66%, thereby resulting in an institutional deadlock rather than a conclusive commercial determination. 19. In such a situation where the CoC is unable to arrive at a determinative outcome despite....
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....urse would subserve the larger objectives of the Code. However, such non-opposition is neither absolute nor unconditional and must necessarily be read subject to appropriate safeguards. If permitted, it must remain subject to strict timelines, procedural compliance, and, most importantly, the ultimate approval of the CoC in accordance with Section 30(4) of the Code. 24. The Corporate Debtor was facing financial distress and defaults towards its creditors. CIRP was commenced on 17.06.2025 upon admission of the Section 7 petition filed by Canara Bank. Subsequently, Claims of three Financial Creditors were received and a three-member Committee of Creditors was constituted comprising Canara Bank, State Bank of India and UV Asset Reconstruction Company Ltd. 25. Form A and thereafter Form G were duly published on 19.06.2025 and 20.08.2025, respectively, inviting claims and Expressions of Interest. However, though two Prospective Resolution Applicants were shortlisted in the 4th CoC meeting, no compliant resolution plan was received by the last extended date of 25.11.2025. 26. In the 7th CoC meeting held on 10.12.2025, the RP placed two key agenda items before the CoC: a....
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.... only as a last resort when all efforts at resolution have demonstrably failed. The Preamble of the Insolvency and Bankruptcy Code, 2016 states: "An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto. BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows: -" 32. In the present case, the direction for liquidation appears to have been triggered primarily on account of the expiry of the CIRP period, rather than on the basis of a conscious and affirmative commercial decision of the CoC approving liquidation with the requisite majority. The absence of a 66% majority in favour of liquidation indicates that the CoC, in its commercial wisdom, had not reached a determinative conclus....
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....ocess; o ensure that all prospective applicants are afforded a fair opportunity; and o align the process with the overarching objective of value maximisation. 36. Canara Bank has no objection to the issuance of a fresh Form 'G', provided the same is undertaken within a time-bound framework and under the supervision of the CoC and the Resolution Professional, in accordance with law. 37. Any direction issued by this Hon'ble Appellate Tribunal permitting revival of the CIRP process or issuance of a fresh Form 'G' must be structured in a manner that preserves the primacy of the CoC's commercial wisdom. Under the Code, the decision of the CoC, taken in its commercial wisdom and in compliance with the statutory threshold, is not to be interfered with except on limited grounds. 38. Any fresh process initiated pursuant to directions of this Hon'ble Appellate Tribunal including issuance of Form 'G' and consideration of resolution plans must ultimately culminate in a decision taken by the CoC in accordance with Section 30(4) of the Code. 39. In this manner, the twin objectives of the Code-namely, facilitating resolution and preserving the commercial ....
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....t approval of any resolution plan. 45. In view of the alleged deadlock, no resolution having been passed, the RP approached the Ld. Adjudicating Authority after taking the approval of the CoC in the 8th CoC meeting dated 29.12.2025, seeking directions regarding the future course of action, including liquidation, and filed I.A. No. 74/MB/2026 on 03.01.2026. 46. Prior to the filing of I.A. No. 74/MB/2026 by the RP before the Ld. AA, SBI (Respondent No. 2 herein), by email dated 01.01.2026, had conveyed its decision to the RP to act strictly in accordance with the Code on the premise that 180 days had elapsed, and no extension for Insolvency Resolution Process Period was approved by the CoC. 47. The Ld. AA, after a detailed analysis, correctly observed that since the CIRP period had expired without an approved resolution plan and the CoC had voted against extension and reissuance of Form 'G' in its meeting held on 10.12.2025, and, by its impugned order dated 08.01.2026, ordered liquidation of the Corporate Debtor under Section 33(1) (a) of the Insolvency and Bankruptcy Code, 2016. 48. The Corporate Insolvency Resolution Process ("CIRP") period prescribed under Section 12 o....
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....permitting continuation of CIRP beyond the prescribed period would defeat the legislative intent and undermine the certainty envisaged under the Code. 52. Ld. Adjudicating Authority has rightly exercised its jurisdiction in ordering liquidation of the Corporate Debtor after noting that the CIRP period had expired and no extension had been validly approved by the Committee of Creditors, and therefore, the Impugned Order does not suffer from any illegality or infirmity warranting interference. 53. The Appellant's (suspended board of director) alleged willingness to submit a resolution plan after expiry of the CIRP period cannot revive or extend the process once the statutory timeline has lapsed. It is submitted that permitting such belated proposals would defeat the discipline of the insolvency framework and lead to indefinite prolongation of CIRP, which is impermissible in law. 54. All the facts of the case were not presented before this Appellate Tribunal while the interim order was granted by this Tribunal. It is submitted that State Bank of India is having 54.84% voting share in the CoC and no resolution was passed by Applicant Bank and the Applicant Bank is also not....
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....8. The Impugned Order dated 08.01.2026 has been passed strictly in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 and does not suffer from any illegality, perversity or jurisdictional error warranting interference by this Hon'ble Tribunal. It is submitted that the present Appeal is devoid of merits and is liable to be dismissed, as the same seeks to defeat the statutory scheme of time-bound resolution and the mandatory consequence of liquidation upon failure of CIRP. Hence, the present appeal shall be dismissed at the very outset. Analysis and Findings 59. We have considered the submissions made by the Appellant, Respondent No. 2/State Bank of India and Respondent No. 3/Canara Bank, and have perused the material placed on record. 60. The issue which arises for consideration is "Whether, after expiry of the CIRP period without a resolution plan being received within the statutory period and without a valid extension of the CIRP period, the Adjudicating Authority could defer liquidation on the ground that the Committee of Creditors had not approved the resolution for liquidation by the requisite majority and had subsequently expressed willingn....
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....ithin the statutory period. 64. The relevant provision has already been extracted in the submissions of Respondent No. 2 and is reproduced herein for clarity: "33. Initiation of liquidation. -(1) Where the Adjudicating Authority, - (a) before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a resolution plan under sub-section (6) of section 30; or ... it shall - (i) pass an order requiring the corporate debtor to be liquidated in the manner as laid down in this Chapter;" 65. In the present case, the condition contemplated by Section 33(1)(a) stood satisfied upon expiry of the CIRP period. There was neither a resolution plan available for consideration under Section 30(6) of the Code, nor there was a valid extension of the CIRP period. The Adjudicating Authority was therefore required to give effect to the statutory consequence under Section 33(1)(a). The expression "shall" used in the provision is significant. Once the statutory condition wa....
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....djudicating Authority any power to revive the expired CIRP contrary to the statutory scheme. The application filed by the Resolution Professional on 03.01.2026, therefore, could not be used as a basis to extend the CIRP after the statutory period had already expired. As it would be contrary to the mandate of law. 70. We also do not find substance in the Appellant's reliance upon the subsequent expressions of interest. An expression of interest in itself is not a resolution plan approved in accordance with the Code. The Appellant's letter dated 18.12.2025 expressing willingness to submit a resolution plan was much after the expiry of the CIRP period on 14.12.2025. Similarly, the communication from another prospective applicant dated 19.12.2025 was also subsequent to the expiry of the statutory period. Such subsequent interest too cannot defeat the mandatory consequence prescribed by Section 33(1)(a). 71. It is also brought to our notice by the SBI/R2 that during the 7th COC meeting, which was held on 10th December 2025, before any plan and before undertakings of confidentiality (regarding fair value and liquidation value) under Regulation 35(2) of the CIRP Regulations,....
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....g the liquidation. Even though we are not going into the reasons for supporting liquidation by State Bank of India, which are recorded contemporaneously in various places but due to peculiar circumstances we extract the reasons herein: o There are no fixed assets like land or building and only receivables and inventory are there. o The corporate debtor is a pure trading entity and it's a supplier. Syska LED Lights Private Limited itself is in CIRP. o The "Syska" brand/trademark is not owned by the corporate debtor. It stands in the name of Mr. Govind Jivan Uttam Chandani. o The peculiar circumstances indicate that one prospective resolution applicant withdrew and sought a refund of its EMD and the other failed to submit a plan despite an extension. 75. The grounds raised by the Appellant are therefore without basis. The Appellant has not demonstrated any statutory provision which permitted the CIRP to continue after 14.12.2025 in the absence of a valid extension. The subsequent meeting of the CoC, the subsequent expressions of interest and the willingness of the Appellant to submit a plan cannot create such power. 76. For the same reaso....