Karvy Forde Search Pvt. Ltd. vs Dropbase Software Pvt. Ltd.

Per: Ms. Reeta Kohli, Judicial Member

The instant Interlocutory Application bearing IA No. 505/JPR/2025 in CP No. (IB) 253/09/JPR/2019 has been filed by the Resolution Professional, Mr. Rajneesh Sharma, to place on record the 3rd status report (for period starting from 21st September, 2023 to 8th October, 2025), in relation to CIRP of Dropbase Software Private Limited (i.e., Corporate Debtor) in compliance of order dated 19.08.2025 wherein this Adjudicating Authority directed the Resolution Professional to file the status report along with the timelines of exclusion and extension sought till date.

The status report dated 11.10.2025 as filed by the RP for period 21.09.2023 to 08.10.2025 revealed that: -

Corporate Insolvency Resolution Process ('CIRP') in respect of the Corporate Debtor was initiated by an Order of this Adjudicating Authority dated 20.10.2022, in CP No. (IB)-253/09/JPR/2019.

The Applicant, Mr. Rajneesh Sharma, was appointed as the Interim Resolution Professional and subsequently confirmed as the Resolution Professional by the Committee of Creditors (CoC) on 29.11.2022.

The CoC comprises of 4 creditors with government entities collectively holding a majority voting share of 81.55%. A list of OCs along with their admitted claims is as follows:-

The RP convened the 3rd Meeting of COC of the Corporate Debtor on 12.04.2024, wherein the RP informed the COC of non-cooperation from the suspended directors, namely Mr. Himanshu Meena and Mr. Akhil Sharma. The following resolutions were placed before the COC for voting. However, none of the resolutions were approved:

Initially, the 4th Meeting of the CoC was convened as scheduled on 05.09.2025 at 03:00 P.M. Mr. Naresh Kumar Sain representing GST Jaipur (64.19% voting share), attended the meeting, fulfilling the required quorum. However, due to lack of the authority to vote on the agenda items, Mr. Naresh Kumar Sain requested deferment for an authorized officer, leading to the meeting's adjournment without any voting.

Thereafter, the 4th meeting of the CoC was reconvened on 19.09.2025, via audio-visual means. Representatives from all three government creditors attended, while the operational creditor, M/s Karvy Forde Search Pvt. Ltd., was absent. The results of e-voting were as follows:

a. Item 10 (Approval of CIRP Costs and RP Remuneration): The resolution was rejected, with 77.62% of the voting share dissenting.

b. Item 11 (Filing of Application for Early Dissolution): This resolution was also rejected, with 77.62% of the voting share dissenting.

The RP submitted that rejection of these resolutions by the majority of the CoC has perpetuated the deadlock in the CIRP.

Further, the RP submitted that various legal proceedings were taking place during said period i.e., from 21.09.2023 to 08.10.2025. The same are enumerated hereunder: -

a. IA No. 654/2022 (Revival of Struck-off Company).

b. IA No. 542/2023 (Non-cooperation by Suspended Directors).

c. IA No. 543/2023 (Payment of CIRP Costs).

d. Company Appeal (AT) No. 1538/2022 (Appeal filed by suspended management against the CIRP initiation).

The Corporate Debtor is asset-less. The only identified item, an outdated software, has no realizable value. No bank accounts with balances or other tangible assets have been found.

The suspended directors, Mr. Himanshu Meena and Mr. Akhil Sharma, have continued their non-cooperation and have failed to provide the books of accounts, financial records, or any other relevant information, severely hampering the CIRP.

The total CIRP costs incurred as of 30.08.2025 is Rs. 30,50,569/-. These costs remain unpaid and were not approved by the COC. The RP is incurring cost from his own pocket and the legal counsel has also not been paid. The RP is not in a position to run the CIRP without cooperation from the COC members who have refused to bear any expenses and also rejection agenda for dissolution of Corporate Debtor. 2.12 Given that the COC has rejected the proposals such as CIRP cost approval for extension, and early dissolution, due to which the CIRP is at a standstill and not making any progress.

Thereafter, the RP filed an affidavit in compliance of the order dated 17.10.2025 passed in the instant IA explaining why a single report was being filed for more than 2 years. The following submission were made under the affidavit dated 03.11.2025: -

The CIRP entered into an effective deadlock after the rejection of key agenda items, including RP’s fees and CIRP cost approval, and proposal to file early dissolution application, with a majority dissenting during e- voting of the 4th COC meeting. 3.2 The RP submitted that, no mandate for the RP, nor approval for CIRP expenses, could be obtained; all statutory and practical obligations of the RP remained unfulfilled due to lack of CoC cooperation and non-approval of necessary proposals. As such, due to non-cooperation by the CoC, no progress could be made warranting filing of the status reports again and again.

The RP further submitted that it was only to save the CIRP cost that RP did not file the status reports without there being any status during CIRP; however, it is the case of RP that all statutory obligations have been complied with.

This Adjudicating Authority vide order dated 18.11.2025 observed that:-

The RP filed an affidavit in compliance of the order dated 18.11.2025 submitting that:-

The Hon’ble NCLAT, Principal Bench, New Delhi, vide its order dated 02.01.2023 passed in Company Appeal (AT) (Ins.) No. 1538 of 2022, directed the RP not to constitute the COC if not constituted yet. The said order was passed in the absence of the Resolution Professional. The order dated 02.01.2023 is reproduced hereunder: -

Subsequently the RP filed its reply and the Hon'ble NCLAT vide its order dated 05.07.2023 was pleased to modify the earlier order dated 02.01.2023 and allowed the Resolution Professional to proceed with the matter since the COC was already constituted. The order dated 05.07.2023 is reproduced hereunder: -

Regarding the observation that “the RP has neither sought any extension nor any exclusion has ever been granted to RP”, the RP submitted that he made repeated efforts to obtain the necessary approval from the CoC to file such an application seeking extension and exclusion. Further, the RP also submitted that it is statutorily mandated to seek approval from the COC before filing an application for extension under Section 12 of the Insolvency and Bankruptcy Code, 2016.

The timeline of CIRP was provided by the RP vide an affidavit dated 06.04.2026. The same is reproduced hereunder: -

We have heard the Ld. Counsel on behalf of the RP and have carefully perused all the documents placed on record, including the affidavits, Minutes of CoC meetings and Hon’ble NCLAT’s order.

At this juncture, it is essential to look at the timeline prescribed for the completion of the CIRP under Section 12 of the Code. As a general rule, under sub-section (1) of the Section 12, the CIRP shall be completed within 180 days from the date of admission of the application to initiate CIRP. In case the CIRP is not completed within 180 days, the Resolution Professional, after obtaining assent of the CoC by a vote of sixty-six percent, may file an application under sub-section (2) & (3) of Section 12 for seeking extension beyond 180 days, but not exceeding 90 days. The second Proviso to sub-section (3) of Section 12 states that CIRP shall be completed within a period of 330 days from the insolvency commencement date. For ease of reference, the Section 12 of the Code is reproduced as follows: -

Further, it is important to take note of the law laid down by the Hon'ble Supreme Court in Committee of Creditors of Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta & Ors (2020) 8 SCC 53. The relevant paragraph is reproduced as follows: -

Upon perusal of the abovementioned Judgment of the Hon'ble Supreme Court, it is clear that the statutory period of 330 days under Section 12 of the Code is the rule and general outer limit, including extensions and time spent in legal proceedings.

It is the discretionary power of the Adjudicating Authority to look into the exceptional circumstances of the case, with due regard to the stage of the CIRP, to grant extension, if any.

In the instant case, CIRP was initiated vide order dated 20.10.2022. Accordingly, statutory period of 180 days provided for completion of CIRP expired on 18.04.2023. However, it is the case of RP that 30.10.2023 was as the Revised CIRP conclusion date, after exclusion of 184 days of stay in the constitution of CoC by NCLAT i.e., 02.01.2023 to 04.07.2023 and period of 10 days for delay in receipt of CIRP order by RP on 31.10.2022.

It is pertinent to take note of the fact that the Hon’ble NCLAT vide order dated 02.01.2023 directed the IRP/RP not to constitute the COC, if not yet constituted. The Hon’ble NCLAT did not stay the CIPR and the RP was under the statutory mandate to proceed with the CIRP. The relevant part of the Order dated 02.01.2023 is reproduced hereunder:-

Hence, upon perusal of the Hon'ble NCLAT's order, it is clear that stay was never granted. Further, the Applicant has made misleading statement regarding the exclusion of 184 days between 02.01.2023 to 04.07.2023 on the account of Hon'ble NCLAT's stay, especially when the Hon'ble NCLAT's order clearly mentioned that the IRP/RP shall not constitute the 'Committee of Creditors', if not yet constituted.

Further, keeping in view the statutory timeline as prescribed under the Code, the period of 180 days provided for completion of CIRP initiated vide order dated 20.10.2022 expired on 18.04.2023. However, no extension was sought by the RP. Even the complete 330 days, which includes the (90 + 60) days extension, if sought, would have lapsed on 15.09.2023.

It is pertinent to mention that only a single meeting of the CoC (i.e., the (1^{\text{st}}) CoC meeting dated 29.11.2022) was conducted during the 180 days. The Applicant, in complete disregard of the timeline, conducted the (2^{\text{nd}}), (3^{\text{rd}}), (4^{\text{th}}) and 5th meeting of CoC on 16.08.2023, 12.04.2024, 09.09.2025 and 11.02.2026 respectively. The Applicant herein, in complete disregard of the CIRP timelines, without seeking any extension, conducted the 5th CoC meeting after 1210 days of CIRP initiation.

It is also necessary to highlight the multiple adjournments availed by the Applicant to provide the timeline of the CIRP's progress. The instant IA was listed on 15.12.2025 when the RP prayed for an adjournment. It is pertinent to mention that on the next date of hearing i.e., 20.01.2026, RP's prayer for short adjournment to provide the complete timeline was allowed. However, on 13.03.2026, when the instant IA was listed, the RP again sought an adjournment to comply with the order dated 20.01.2026 to file the timelines. Further, the RP once again prayed for a last opportunity to tender timeline and the instant IA was posted to 21.04.2026.

It is clear that the RP never sought any extension and more than 3.5 years have lapsed since the initiation of CIRP. At this juncture, it is pertinent to mention that the Applicant herein was duty bound to inform this Adjudicating Authority regarding the lapse of statutory period of 180 days for completion of CIRP even if the CoC did not pass any resolution to file an application seeking extension before the Adjudicating Authority. The relevant clause of Code of Conduct for the Insolvency Professional as provided under IBBI (Insolvency Professionals) Regulations, 2016 are reproduced hereunder: -

On perusal of the Code of Conduct, it becomes clear that the Resolution Professional is duty bound to adhere to the timelines prescribed under the Code and the Regulations made thereunder. Thus, the Resolution Professional is duty-bound to ensure compliance with the provisions of the Code and Regulations made thereunder, and any continuation of the CIRP beyond the prescribed period without following due process amounts to a serious lapse in the professional conduct.

Keeping in view the facts and circumstances of the case, there is no likelihood of resolution in the instant CIRP in the near future. Since the CIRP has reached a deadlock and more than 3.5 years have expired since the initiation of CIRP, the Adjudicating Authority is left with no other option but to order the Corporate Debtor to go under liquidation in terms of the provision of Section 33(1) of the Code, which is reproduced as follows:-

Keeping in view the conduct of the Resolution Professional, especially with respect to the complete disregard to the CIRP timeline and the observations made under paragraph no. 13, this Adjudicating Authority deems it appropriate to appoint Ms. Anubha Singh bearing Registration No. IBBI/IPA-001/IP-P-02784/2022-2023/14260 with the email address anubha.singh5@gmail.com as the Liquidator of the Corporate Debtor i.e., Dropbase Software Pvt. Ltd.

In view of the above, it is hereby ordered as follows: -

The Registry is also directed to send e-mail copies of the order forthwith to all the parties/their Learned Counsel and the Liquidator appointed by the instant order for information and for taking necessary steps.