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Judgment
01.09.2026: This appeal is filed against an impugned order dated 13.05.2026 passed by Ld. NCLT, Mumbai whereby an application IA(IBC)(LIQ.)/37(MB)2026 in CP No. 745 of 2025 filed under section 33 of the IBC, 2016 by the Resolution Professional for initiating liquidation process against the Corporate Debtor was allowed. Such an order is challenged before us by one of the PRAs viz Labh Capital Services Limited.
It is the submission of the Ld. Counsel for the Appellant there were three PRAs viz Willingdon Properties LLP; Mr. Sarvesh Agarwal; and M/s Labh Capital Services Limited i.e. the Appellant herein. During the meetings of the CoC, Mr. Sarvesh Agarwal dropped out from the race and only two PRAs M/s Willingdon Properties LLP and M/s Labh Capital Services Limited, i.e. the Appellant herein, were left. The resolution plan submitted by the Appellant was rejected by the Resolution Professional and it is the grievance of the Appellant that its plan was not placed before the CoC.
It is argued the admission order in the present CIRP was passed by the Ld. NCLT on 09.09.2025 and liquidation order was passed on 13.05.2026 vide the impugned order.
It is argued the first resolution plan was submitted by the Appellant on 12.02.2026 but the Appellant was required by the Resolution Professional on 16.03.2026 to comment on certain observations made by him and to make certain compliances.
It is alleged such compliances were made and on 03.04.2026 a fresh resolution plan was submitted by the Appellant. Yet again, Resolution Professional raised certain objections on 09.04.2026 and the Appellant even responded to such remarks on 10.04.2026 and 29.04.2026 and some compliances were made by the Appellant. It is argued the Resolution Professional had a difference of opinion with the Appellant and he did not place the comments of Appellant before the CoC and proceeded to move ahead by moving an application for liquidation. Heard.
We have perused the impugned order more specifically paras (g), (h) and (i) of para 3 as under:
“3.(g) In the 8th meeting of the Committee of Creditors (CoC) held on 09.04.2026, the Resolution Professional informed the members that the final revised Resolution Plans had been received from Labh Capital Services Limited and Willingdon Properties LLP. The Resolution Professional further placed and discussed the said Resolution Plans along with the respective compliance reports, which had already been shared with the members of the CoC and the Prospective Resolution Applicants (PRAs) on 09.04.2026. During the deliberations on the respective Resolution Plans, one of the PRAs, namely Mr. Sarvesh Agarwal, infom1ed the members of the CoC of his intention to withdraw from the resolution process. Thereafter, the Resolution Professional discussed the Revised Resolution Plan submitted by Labh Capital Services Limited. Upon review, it was observed that the said Revised Resolution Plan was non-compliant with the provisions of Section 30(2) of the Insolvency and Bankruptcy Code, 2016, as well as the terms of the Request for Resolution Plan (RFRP). Accordingly, the said plan could not be placed for voting before the members of the CoC.
(h)During the aforesaid meeting, the Resolution Professional ("RP") also deliberated upon the Revised Resolution Plan submitted by Willingdon Properties LLP, wherein it was observed that the said plan was non-compliant with the mandatory requirements stipulated under the Request for Resolution Plan ("RFRP"). Subsequently, the members of the Committee of Creditors ("CoC") also examined the feasibility and viability of the Revised Resolution Plans received from the Prospective Resolution Applicants ("PRAs") and were of the considered view that the said plans do not maximize the value of the Corporate Debtor and are not aligned with the monetary expectations of the CoC. In view of the foregoing, the members of the CoC, in their commercial wisdom, were not inclined to consider the Revised Resolution Plans submitted by the PRAs and further directed the RP to place an agenda for approval of liquidation of the Corporate Debtor.
(i)During the aforesaid meeting, the members of the CoC by 100% of voting share has approved the agenda for initiating the liquidation process of the Corporate Debtor.”
Admittedly a scheme under liquidation is also submitted by the Appellant itself, though rejected by the SCC, which is now under challenge before the Ld. NCLT.
Now under sub-section (3) of Section 30 of the Code, the Resolution Professional is bound to place these plans before the CoC which conform to the conditions in sub-section (2) of Section 30 and since Appellant’s plan was not complaint of these provisions, the Resolution Professional was well within his right in not putting it up. But instead, here it was rather put up for voting, and decided against the Appellant by the CoC, and duly noted in sub-para (h) of para 3 of the impugned order.
Section 30(3) of IBC, 2016 is extracted below:
“30 (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2).”
Further per Section 33(1)(a), (b)(ii) of the Code, if the compliant resolution plan is not received under 33(6), the Ld. Adjudicating Authority can pass an order of liquidation. All these contentions have been dealt in para 4 of the impugned order itself as under:
“4)Section 33(1)(a) of the Insolvency and Bankruptcy Code provides that, where the Adjudicating Authority, before the expiry of the insolvency resolution process period or the maximum period permitted for completion of the corporate insolvency resolution process under section 12 or the fast track corporate insolvency resolution process under section 56, as the case may be, does not receive a Resolution Plan under sub-section ( 6) of section 30, it shall pass an order requiring the Corporate Debtor to be Liquidated in the manner as laid down in this Chapter. Further, the CoC has also resolved to liquidate the corporate debtor. In that view of the matter, we are of considered view that the Corporate Debtor is required to be liquidated immediately upon expiry of Corporate Insolvency Resolution Process period. Accordingly, the Corporate Debtor is ordered to be liquidated and following consequential order is passed.
a. The Application IA(IBC)(LIQ.)/37(MB)2026 is allowed. The Corporate Debtor, M/s Axis Corporate Advisors Limited, shall be liquidated in the manner as laid down in Chapter-III of the Code.
b. Mr. Mukesh Khathuri having Registration No. IBBI/IPA-001/IPP01216/2018-2019/11925 is appointed as Liquidator of M/s Axis Corporate Advisors Limited.
c. The Liquidator for conduct of the Liquidation proceedings would be entitled to the fees as provided in Regulation 4(2)(b) of the IBBI (Liquidation Process Regulations), 2016, if the fees is not approved by CoC in CIRP process or, failing which, by SCC.
d. The Moratorium declared under Section 14 of the IBC 2016 shall cease to be in force from today.
e. Liquidator shall issue public announcement stating that Corporate Debtor is in liquidation.
f. The Liquidator shall proceed in accordance with Regulation 32 of the Liquidation Process Regulations.
g. Subject to Section 52 of the Code no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. This shall however not apply to legal proceedings in relation to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
h. All powers of the Board of Directors, Key Managerial Personnel and partners of the Corporate Debtor shall cease to have effect and shall be vested in the Liquidator.
i.The Liquidator shall exercise the powers and perform duties as envisaged under Sections 35 to 50 and 52 to 54 of the Code read with the Liquidation Process Regulations.
j. Personnel connected with the Corporate Debtor shall extend all assistance and cooperation to the Liquidator as will be required for managing its affairs
k. This Order shall be deemed to be a notice of discharge to the officers, employees and workmen of the Corporate Debtor, except when the business of the Corporate Debtor is continued during the liquidation process by the Liquidator.
l. The Liquidator shall submit progress reports as per Regulation 15 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
m. The Liquidator is hereby Authorized to represent the Corporate Debtor before the Government Authorities, if need be.”
Considering the submissions made above, we see no reason to upset a reasoned order passed by the Ld. NCLT and the appeal being without any merit is dismissed. Pending applications viz I.A. No. 5405, 5476, 5477 of 2026 also closed.