Canara Bank vs ARS Energy Pvt Ltd

This application IA(IBC)/LIQ/7(CHE)/2026 under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules, 2016 has been filed by Ms. R. Bhuveneshwari, RP of the Corporate Debtor, ARS Energy Private Limited seeking liquidation of the Corporate Debtor and for appointing her as the Liquidator of the Corporate Debtor in accordance with Section 34 of IBC, 2016.

It is stated that CIRP against the Corporate Debtor was initiated vide an order dated 14.02.2025 in CP(IB)/99(CHE)/2024 and the Applicant was appointed as the IRP/RP. She made a public announcement on 19.02.2025 inviting claims from the stakeholders in the prescribed forms. She received the claims, collated and verified in accordance with Regulation 13 of CIRP Regulations, 2016. Based on the claim received and admitted, Committee of Creditors (CoC) came to be constituted on 13.03.2025. First meeting of the CoC was convened on 18.03.2025 where Applicant continued to function as RP. Thereafter, she undertook all necessary statutory compliances required for completion of the CIRP including taking control and custody of the assets of records of the Corporate Debtor, appointed Registered Valuers, prepared Information Memorandum and conducted the meetings of the CoC from time to time for facilitating Resolution Plans for the revival of the Corporate Debtor. She issued Form-G on 21.04.2025 inviting Expression of Interest from the Prospective Resolution Applicants (PRAs). Pursuant thereto, PRAs submitted their EOI and Resolution Plans for consideration of the CoC. A total of six Resolution Plans were received out of which, four eligible Resolution Plans were shortlisted and placed before the CoC for valuation and negotiations. The PRAs participated in multiple rounds of negotiations with the CoC conducted during the months of July, 2025 and August, 2025, however, no Resolution Plan could be approved by the CoC. The CoC observed that the financial proposals contained therein were significantly lower than the liquidation value of the Corporate Debtor and were not commercially acceptable. In the meeting held on 16.09.2025, it was resolved for issuance of fresh Form-G for maximization of value of the assets of the Corporate Debtor. Pursuant thereto, 2^nd Form-G was issued on 18.09.2025 and on 15.11.2025, she received seven Resolution Plans. She placed the plans before the CoC for consideration. The CoC deliberated the plans during the period from 15.11.2025 and 29.12.2025 with the PRAs and received the final resolution plans on 29.12.2025 from seven PRAs as detailed below:

The plans were put for voting in the CoC meeting held on 09.01.2026. The voting was closed on 23.03.2026. All the banks except Bank of Baroda, voted. The Applicant received a mail from Bank of Baroda on 25.03.2026 where it dissenting from the Resolution Plans. As per the voting sheet, all the members of the CoC voted against the resolution plans considering the feasibility, viability and commercial aspects of the plans. The Applicant placed the copy of the 15^th CoC meeting as Annexure-B giving the fair value and liquidation value.

It is stated that in order to maximize the possibility of the resolution of the Corporate Debtor, CIRP period was extended from time to time with the approval of the CoC and the Tribunal within the maximum period permitted under section 12 of IBC. It is stated that despite availing the entire permissible CIRP period and exploring all possible avenues for revival including invitation of EOI, receipt and evaluation of multiple resolution plants and conducting of several rounds of negotiations with the PRAs, no viable and acceptable resolution plan could be approved by the CoC. The Applicant has given the list of CIRP timeline as tabulated below and copies of the CIRP extension orders (Annexure-C).

It is stated that in the absence of any approved resolution plan within the statutory CIRP period and after due deliberations on the feasibility of revival of the Corporate Debtor, the CoC in 18^th meeting held on 24.03.2026 which was continued on 25.03.2026 unanimously resolved to liquidate the Corporate Debtor under section 33(2) of IBC, 2016. The CoC holding 63.38% also approved to appoint the Applicant as Liquidator of the Corporate Debtor. The resolution is reproduced as under:

The results of Physical Voting by ‘Show of hands’ are as below:

The results of physical voting are as below:

The Resolution appointing RP as Liquidator was VOTED FOR by CoC members holding voting share of 63.38 % and VOTED AGAINST by the CoC member Canara Bank holding 36.62% Voting share. Accordingly, the Resolution is declared as “ FAILED“ as it did not get 66% voting. However, considering the majority of CoC members having voting share of 63.38% consenting for the present Resolution Professional to continue as Liquidator and also considering Section 34 of the Code which is authorising the consenting RP to continue as Liquidator, RP explained to the CoC that she will be filing application for Liquidation along with “Consent Form of RP” to act as Liquidator. CoC agreed with the above.

The Applicant has placed the minutes of the CoC as Annexure-D and the copy of the Applicant’s written consent as Liquidator along with the Affidavit as Annexure-E. It is stated that although the resolution as to the appointment of the Applicant as Liquidator failed as it did not get 66% voting but considering the majority of CoC members having voting share of 63.38% consenting for the RP to continue as Liquidator and Section 34 of IBC authoring the consenting RP to continue as Liquidator, the RP explained to the CoC that she has been filing an application for liquidation along with consent which CoC agreed.

It is stated that the CoC has taken a decision to liquidate the Corporate Debtor after exhausting all possible efforts for revival of the Corporate Debtor and after consideration of the resolution proposals and the said decision represents the commercial wisdom of the Financial Creditors which is binding. It is stated that continuation of CIRP beyond statutory period would serve no useful purpose and would only result in further depletion of the value of the assets of the Corporate Debtor and therefore liquidation would be in the interest of all stakeholders.

We have heard Ld. Counsel for the Liquidator as well as the Liquidator and perused the material placed on record.

In the present case, after initiation of CIRP vide an order dated 14.02.2025, the IRP invited the claims from the stakeholders. She constituted the CoC on 18.03.2025 comprising secured financial creditors i.e. Bank of Baroda, Canara Bank, State Bank of India, Punjab National Bank and HDFC Bank Limited holding 100% voting share within agreed financial debt of approximately Rs.387.40 Crores. After getting the records and relevant information, she prepared the Information Memorandum and issued the Form-G on 21.04.2025 with the approval of the CoC. She received six resolution plans from the PRAs which she placed before the CoC for deliberations and negotiations. Since the resolution plans were significantly lower than the liquidation value of the Corporate Debtor and not commercially acceptable, the CoC in the 11^th meeting held on 16.09.2025, resolved to issue fresh Form-G. The Applicant issued the 2^nd Form-G on 18.09.2025. Seven resolution plans were received and deliberated. The plans were put for voting on 09.01.2026 which was closed on 23.03.2026. The members of the CoC with 100% voting, voted against the resolution plans considering the feasibility, viability and commercial aspects of the plans. The Applicant has placed the minutes and the voting sheet in this regard. The CIRP period was expired on 24.02.2026 which was extended four times as seen from the tabulation above. The CoC thereafter in the meeting held on 24.03.2026 which was continued on 25.03.2026 resolved to liquidate the Corporate Debtor with 100% voting. The resolution to this effect has been reproduced above.

It is seen that this decision to liquidate the Corporate Debtor was taken after exhausting all possible efforts for revival of the Corporate Debtor and after consideration of all the resolution plans received during the CIRP period and the said decision represents the commercial wisdom of the Financial Creditors. The Applicant has also stated that the continuation of CIRP beyond the statutory period would serve no useful purpose and would only result in further depletion of the value of the assets of the Corporate Debtor and liquidation of the Corporate Debtor would be in the interest of all the stakeholders. The Applicant has also submitted Form-H at page 130 stating that no PUFE applications are pending against the Corporate Debtor.

In the present case, the Applicant/RP had offered to act as Liquidator. Voting on her appointment was taken place in the CoC meeting held on 25.03.2026, however, only 63.38% voted in favour of appointing the Applicant/RP as Liquidator. Canara Bank did not vote in favour of the Applicant. The Applicant did not get 66% voting which is the requisite for her appointment as Liquidator.

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. Her AFA is valid till 31.12.2026 and she has given consent and affidavit to act as Liquidator.

Considering the facts and circumstances and the resolution of the CoC, we allow the application initiating liquidation process against the Corporate Debtor, ARS Energy Private Limited. We appoint Ms. R. Bhuvaneshwari having IBBI Registration No. IBBI/IPA-002/IP-N00306/2017-18/10864 (Email ID: bhoona.bhuvan@gmail.com) and her AFA valid till 31.12.2026 as the Liquidator to conduct the liquidation proceedings at the initial fee and expenses of Rs. 3,00,000/-(Rupees Three Lakhs only) excluding GST and applicable taxes. SCC is directed to fix the fee of the Liquidator and cost of the liquidation in the 1^st meeting of the SCC as resolved in the 18^th CoC meeting. The Liquidator is directed to carry out the liquidation process subject to the following terms of directions.

The Registry is directed to communicate this order to the Registrar of Companies and to the Insolvency and Bankruptcy Board of India.

The order of Moratorium passed under Section 14 of the Insolvency and Bankruptcy Code, 2016 shall cease to have its effect and that a fresh Moratorium under section 33(5) of the Insolvency and Bankruptcy Code shall commence.

Copy of this order be sent to the financial creditors, Corporate Debtor and the Liquidator for taking necessary steps and for extending the necessary co-operation in relation to the Liquidation process of the Corporate Debtor.

In terms of the above order, application IA(LIQ)/7(CHE)/2026 is disposed of.