CIRP Expiry Without Resolution Plan Mandates Liquidation, Failed CoC Liquidation Vote Irrelevant: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that once the insolvency resolution period expires without receipt of a resolution plan or a valid extension, liquidation becomes mandatory under the Insolvency and Bankruptcy Code (IBC).

It also held that a failed vote on a separate liquidation proposal or expressions of interest received after the deadline cannot revive an expired insolvency process.

“We therefore hold that once the CIRP period expired without receipt of a resolution plan under Section 30(6) and without any valid extension, the statutory consequence under Section 33(1)(a) stood attracted. The Adjudicating Authority was left with no option but to pass an order of liquidation. The voting on the separate liquidation resolution was not a condition precedent to the exercise of the statutory power under Section 33(1)(a),” the bench observed.

The bench comprised Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey.

The appeal was filed by Rajesh Uttamchandani, a suspended partner of Syska E-Retails LLP, against the liquidation order passed by the Mumbai bench of the National Company Law Tribunal (NCLT).

The corporate insolvency resolution process (CIRP) began on June 17, 2025, after the NCLT admitted Canara Bank's petition under Section 7 of the IBC. Section 7 allows a financial creditor to initiate insolvency proceedings against a corporate debtor following a default.

The Committee of Creditors (CoC), which takes key decisions during CIRP, comprised Canara Bank, State Bank of India (SBI) and UV Asset Reconstruction Company Ltd.

Form A was issued to invite claims from creditors. Form G was later issued to invite expressions of interest from prospective resolution applicants seeking to submit plans for revival of the corporate debtor.

Two prospective resolution applicants were shortlisted. However, no compliant resolution plan was received by the extended deadline of November 25, 2025.

At its seventh meeting on December 10, the CoC considered a 90-day extension of the CIRP and initiation of liquidation. Neither proposal secured the required 66% voting share.

The CIRP period expired on December 14 without a valid extension or a resolution plan.

After the expiry, Uttamchandani and another prospective applicant expressed interest in submitting resolution plans. Uttamchandani also relied on Section 240A, which provides statutory relaxations to eligible MSMEs submitting resolution plans.

The CoC subsequently authorised the resolution professional to approach the NCLT for directions on the future course of the process. The resolution professional sought condonation of the delay and directions on whether the CIRP could be extended or liquidation should follow.

The NCLT refused to condone the delay and ordered liquidation under Section 33(1)(a). This provision requires liquidation where the adjudicating authority does not receive a resolution plan within the prescribed insolvency period.

Before the NCLAT, Uttamchandani argued that the NCLT had overridden the CoC's commercial decision-making despite continuing interest in revival.

Canara Bank submitted that the CoC had reached a deadlock. It did not oppose a limited revival mechanism, but said any such course would have to comply with the Code and remain subject to the CoC's approval.

SBI argued that the CIRP could not continue after the statutory period had expired. It also contended that subsequent expressions of interest could not revive an expired CIRP.

The NCLAT rejected the appellant's case.

The bench distinguished Section 33(1)(a) from Section 33(2). Section 33(1)(a) applies when the insolvency period expires without receipt of a resolution plan.

Section 33(2), by contrast, concerns liquidation where the CoC itself resolves to liquidate the corporate debtor with the required voting majority.

“The voting on the separate liquidation resolution was not a condition precedent to the exercise of the statutory power under Section 33(1)(a),” the bench ruled.

The bench also held that the failed CoC votes could not create a deadlock capable of extending the CIRP. Even if the voting pattern was described as a deadlock, it could not override the statutory timeline, the tribunal observed.

The eighth CoC meeting was held after the CIRP had already expired. The tribunal held that the meeting could not revive the process.

The expressions of interest received on December 18 and 19 also could not substitute for a resolution plan received within the prescribed period.

The tribunal further held that Section 240A may allow an eligible MSME to avail certain statutory relaxations, but cannot by itself revive an expired CIRP.

The NCLAT dismissed the appeal and affirmed the NCLT's January 8, 2026 order directing liquidation of Syska E-Retails LLP.