NCLT New Delhi Terminates CIRP Against Presidium & Mothers Pride Over 330-Day Delay, No Resolution Plan

On 1 June, the New Delhi Bench of the National Company Law Tribunal (NCLT) ended the insolvency proceedings against Presidium Educational Institution Pvt. Ltd. and Mothers Pride Education Personna Pvt. Ltd., after finding that the process had gone beyond the 330-day legal limit, suffered from irregularities, and did not result in any resolution plan.

Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Atul Chaturvedi disposed of the CIRPs and recalled the admission orders and withdrew the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016. The Bench held:

“In the totality of the circumstances, this Adjudicating Authority is constrained to observe that the CIRP suffers not merely from delay, but from foundational infirmities that go to the root of its legitimacy and workability. The discrepancies highlighted in the Court Commissioner's Report, the failure of the erstwhile Resolution Professional and the CoC to address the same, the absence of financial records, the inability to establish control over the Corporate Debtor, negligible progress in the CIRP despite multiple extensions, collectively raise serious concerns regarding the integrity of the process.”

Yes Bank Ltd. (Yes Bank Ltd.) initiated the CIRPs under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Tribunal appointed multiple Resolution Professionals over time, and Ashok Arora assumed charge in June 2025.

The Resolution Professionals later sought extensions of 90 days under Section 12(2), arguing that earlier RPs had caused delays, promoters and suspended directors had failed to cooperate, and critical CIRP tasks remained incomplete.

They also submitted that they had taken steps to progress the process, including renewing the corporate debtors' trademarks, conducting site visits to schools in Delhi NCR, and initiating measures to secure digital assets through forensic applications, contempt proceedings, and police complaints.

They further argued that the Tribunal must extend the CIRP period to avoid automatic liquidation, which, according to them, would cause irreparable prejudice to creditors and allow suspended promoters—allegedly involved in misappropriation—to escape accountability.

The Tribunal held that the CIRPs had already exceeded the statutory limit of 330 days and no resolution plan had been received. Relying on the Supreme Court's ruling in Essar Steel India Ltd. v. Satish Kumar Gupta, it reiterated that courts must grant extensions only in rare cases where resolution appears imminent.

The Bench noted that no prospective resolution applicants had emerged and found that the CIRPs remained far from completion. It also observed that the proceedings suffered from serious procedural and substantive deficiencies from the beginning.

It relied on the Court Commissioner's Report of May 2024, which flagged major irregularities during the tenure of the erstwhile Resolution Professional. The Tribunal noted that the Committees of Creditors did not address these issues. It also recorded that the promoters continued to run schools through trusts and franchise structures while no revenue flowed into the corporate debtors' accounts, leaving them “in form but not in substance”.

The Tribunal held that the CIRPs shifted away from resolution and instead focused on asset tracing and collateral litigation. It ruled that continuing the proceedings would perpetuate a process that remained “fundamentally flawed, incapable of resolution, and contrary to the legislative intent of the Code”.

It further held that liquidation would not benefit creditors, as the corporate debtors held minimal realisable assets. The Bench also observed that liquidation would effectively benefit the defaulting promoters, who continued to exercise indirect control over the institutions outside the formal corporate structure.

Accordingly, the NCLT terminated the CIRP and closed the proceedings.