NCLT Delhi Orders Liquidation Of Hero Electric Vehicles After Creditors Fail To Approve Resolution Plan

The New Delhi bench of the National Company Law Tribunal (NCLT) has recently ordered the liquidation of electric scooter maker Hero Electric Vehicles Pvt. Ltd. after the company's insolvency resolution process ended without approval of any resolution plan.

A bench of Judicial Member Bachu Venkat Balaram Das and Technical Member Reena Sinha Puri held that once the Corporate Insolvency Resolution Process (CIRP) expires without an approved plan, liquidation must follow under the Insolvency and Bankruptcy Code.

“It is well settled that a separate resolution of the CoC approving liquidation by 66% voting share is not a pre-condition for ordering liquidation under Section 33(1)(a) once the CIRP period has so expired,” the tribunal observed.

The insolvency process against Hero Electric Vehicles was initiated on December 20, 2024 after operational creditor Metro Tyres Limited approached the tribunal under the IBC.

A committee of creditors comprising Bank of Baroda, Kotak Mahindra Bank, IDFC First Bank, Karnation Fund acting through Mitcon Credentia Trusteeship Services Ltd., South Indian Bank and unsecured creditor SLK Software Pvt. Ltd. was constituted to evaluate resolution plans.

During the process, multiple expressions of interest were invited, and two resolution plans were eventually received. Although both were found feasible and viable, neither secured the mandatory 66% voting share of the creditors. The highest-voted plan received only 47.66% support.

Even after re-voting under the insolvency regulations, the creditors remained deadlocked, with roughly half supporting approval of a resolution plan and the rest favouring liquidation.

With the CIRP period expiring on February 13, 2026 without any plan being approved, the tribunal said continuing the process would serve no purpose.

“In these circumstances, any further continuation of the CIRP would serve no useful purpose and would only perpetuate a deadlock, thereby defeating the time-bound object of the IBC,” the bench said.

The tribunal accordingly ordered liquidation of the company under Section 33(1)(a) of the IBC, relieved the resolution professional of his duties, and appointed insolvency professional Lekhraj Bajaj as the liquidator.