NCLT Chennai Orders Liquidation Of ARS Energy After CoC Fails To Approve Resolution Plan

On 5 May, the Chennai Bench of the National Company Law Tribunal ordered liquidation of ARS Energy Private Limited after the Committee of Creditors failed to approve any resolution plan and the proposal to appoint the Resolution Professional as liquidator did not secure the mandatory voting threshold under the Insolvency and Bankruptcy Code, 2016.

Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam allowed an application filed by Resolution Professional R. Bhuvaneshwari under Section 33(2) of the Code and directed initiation of liquidation proceedings along with her appointment as liquidator. The Bench observed:

“Since majority has voted in favour of the Applicant to act as Liquidator and no disciplinary proceedings are pending against the Applicant before IBBI and there is no complaint against the Applicant during the CIRP process by any of the stakeholders, it would be in the best interest of the Corporate Debtor to appoint the Applicant Ms. R. Bhuvaneshwari as the Liquidator of the Corporate Debtor. “

The Corporate Insolvency Resolution Process (CIRP) against ARS Energy Private Limited commenced in February 2025. The Resolution Professional invited claims, constituted the Committee of Creditors (CoC), appointed valuers, prepared the information memorandum and issued Form-G to solicit resolution plans.

Six resolution plans emerged in response to the first Form-G, and the CoC shortlisted four of them. It, however, rejected all the plans as the bids fell significantly below the liquidation value of the corporate debtor. A second Form-G attracted seven more resolution plans, with offers ranging from Rs. 21.01 crore to Rs. 178.08 crore. The CoC rejected all of them, citing concerns over feasibility, viability and commercial acceptability.

Despite multiple extensions within the statutory CIRP timeline, no resolution plan secured approval. The CoC therefore resolved to liquidate the corporate debtor, noting that continued CIRP would further erode asset value. Although 63.38% of the CoC voted in favour of appointing the Resolution Professional as liquidator, the proposal fell short of the mandatory 66% threshold after Canara Bank voted against it.

The Bench noted that the CoC exercised its commercial wisdom after evaluating all resolution options and found no viable plan during the CIRP.

Accordingly, the NCLT allowed the application, ordered liquidation of ARS Energy Private Limited and appointed R. Bhuvaneshwari as liquidator.

For Applicant: Advocate Srinandan Karthikeyan