M/s. JC Flowers Asset Reconstruction Pvt Ltd vs M/s GVK Transportation Pvt Ltd

PER: BENCH

The present application is filed by the Applicant/Resolution Professional of M/s GVK Transportation private limited (hereinafter referred to as 'corporate debtor') under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'IBC'), seeking the following reliefs; i) To allow the instant Application for the initiation of liquidation process qua M/s GVK Transportation Private Limited in terms of Section 33(2) of the Code; ii) To appoint Aegis Resolution Services Private Limited [IBBI Registration No. IBBI/IPE-0118/IPA-1/2022-23/50041] as Liquidator of the Corporate Debtor; and iii) Pass any other order(s) as this Hon'ble Tribunal may deem fit in the facts and circumstances of the present case.

The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor pursuant to the admission of an Application under Section 7 of IBC by this Tribunal vide order dated 06.08.2024 in CP (IB) No. 69/7/HDB/2022, wherein the Applicant herein was appointed as the Interim Resolution Professional (IRP).

Following the appointment, the applicant herein made a public announcement for receiving claims from the creditors. Upon receiving the claims, the committee of creditors (CoC) was constituted. Accordingly, the 1st CoC meeting held on 05.09.2024, confirmed the applicant here as the resolution professional of the corporate debtor with a majority vote of 95.84%.

In the course of the CIRP, it is submitted that the resolution professional took all necessary steps for value maximization, including the constitution and reconstitution of the CoC, appointment of Registered Valuers and Transaction Auditor, issuance of Form G, and invitation and evaluation of Resolution Plans in accordance with the provisions of the IBC and CIRP Regulations. A total of 10 Prospective Resolution Applicants (PRAs) initially expressed interest, out of which only two Resolution Plans were finally submitted i.e., by Tavasya SSF and MKS Constro Ventures Pvt. Ltd.

Upon examination and negotiations between the CoC and the PRAs, it was observed by the CoC that both plans failed to comply with the provisions of IBC and the requirements laid down under the RFRP and Evaluation Matrix. Despite multiple follow-ups and opportunities granted to improve the commercial terms and resolve compliance issues, both PRAs failed to submit acceptable revised plans. It is submitted that Tavasya SSF did not enhance the value to financial creditors and sought infusion only for working capital and litigation purposes, whereas MKS Constro Ventures Pvt. Ltd. refused to revise its plan at all.

In the 7th CoC meeting held on 24.06.2025, the resolution professional also apprised the CoC that both the received resolution plans were non-compliant and the CIRP period was nearing expiry. The resolution professional further apprised the CoC of the Corporate Debtor's asset base, consisting mainly of investments and unsecured loans to group entities/SPVs, namely: - GVK Bagodara Vasad Expressway Pvt. Ltd., which is under arbitration with an award passed against it; - GVK Deoli-Kota Expressway Pvt. Ltd., which has terminated operations and is involved in an ongoing arbitration claim of approximately Rs. 6,000 Crores against NHAI; and - GVK Jaipur Expressway Pvt. Ltd., where the concession agreement ended in April 2023, leaving no future revenue prospects.

It is submitted that upon deliberation, the CoC members observed that given the limited and legally encumbered asset base of the Corporate Debtor—primarily comprising investments and unsecured loans in three group SPVs with ongoing arbitration proceedings—there existed no realistic prospect of value maximization through a re-run of the resolution process. It was noted that efforts to explore structures involving loan assignments or transfer of arbitration rights also failed to yield any viable interest from PRAs.

Given the poor realizable value and failure of resolution process, the CoC, in its (7^{\text{th}}) meeting held on 24.06.2025 with (74.93%) majority voting resolved to initiate liquidation of the Corporate Debtor under Section 33(2) of IBC.

Further, in its (8^{\text{th}}) meeting held on 22.07.2025, the CoC approved the appointment of Aegis Resolution Services Pvt. Ltd. [IBBI Reg. No. IBBI/IPE-0118/IPA-1/2022-23/50041], as the Liquidator, with (74.93%) voting, and with the same voting majority approved the Liquidator's fees as Rs. 10,00,000 (excluding taxes and out-of-pocket expenses).

The resolution professional submits that the decision of the CoC to liquidate the Corporate Debtor is based on commercial wisdom, considering the failure to receive any viable and compliant Resolution Plan and the absence of value maximization prospects.

The Tribunal notes that the resolution professional filed a Memo clarifying that the Liquidator proposed by the CoC, though not part of the IBBI's panel of Insolvency Professionals (South Zone), may still be appointed under Section 33(2) of IBC.

The resolution professional has placed reliance on:

- IBBI Guidelines dated 27.05.2025, which clarify that the panel is prepared to aid the Adjudicating Authority in cases where no recommendation is made by parties;

- IBBI Letter dated 18.07.2023, where the language used ("can be appointed") is clearly directory and not mandatory;

- Judicial precedents, including orders of the Hyderabad Bench in APF Estates Pvt. Ltd. (08.08.2025) and the Bengaluru Bench in Royal Oak Furniture India LLP (20.06.2024), where Liquidators outside the panel were appointed on the strength of CoC recommendation.

We have heard the Ld. Counsel Mr. Amir Bavani for the resolution professional and perused the records.

On perusal of the minutes of the (7^{\text{th}}) meeting of the CoC held on 24.06.2025, we find the CoC, after extensive deliberations and exhaustive efforts to revive the Corporate Debtor resolved to initiate liquidation proceedings. The said decision was approved with a voting share of 74.93%. We further find that the process undertaken was in consonance with the provisions of the IBC and CIRP Regulations. There appears to be no procedural irregularity or perversity in the said decision. The Resolution Professional has also affirmed compliance with all applicable statutory requirements. We are, therefore, of the considered view that the case is fit for initiation of liquidation under Section 33 of the IBC.

At this juncture, we usefully refer to section 34 of IBC with regard to appointment of the liquidator. The provision is extracted below;

We have carefully examined the course of action undertaken during the CIRP, as well as the submissions made by the Resolution Professional. It is evident that, despite providing adequate opportunities and time to the PRAs, no resolution plan was received that complied with the requirements under Section 30(2) of the IBC. Furthermore, we take note of the CoC's observation during its 7th meeting held on 24.06.2025, regarding the ongoing arbitration proceedings and the nature of the Corporate Debtor's asset base. It was also observed that the financial position of the Corporate Debtor did not support continuation of the CIRP or initiation of a fresh bidding process. In view thereof, the circumstances envisaged under Section 34(4)(a) of IBC stand duly satisfied.

We further note that in the 8th CoC meeting held on 22.07.2025 (Annexure A-11 at page no. 300), the CoC approved the appointment of Aegis Resolution Services Private Limited (IBBI Reg. No. IBBI/IPE-0118/IPA-1/2022-23/50041), an Insolvency Professional Entity (IPE), to act as the Liquidator of the corporate debtor. The said resolution was approved by 74.93% voting (page no. 302). The relevant portion of the resolution, is extracted hereunder;

In view of the CoC's decision to appoint an Insolvency Professional Entity (IPE) as the Liquidator under Section 34(4)(b) of the Code, it becomes relevant to refer to authoritative commentaries that elucidate the scope and intent behind such provision. In this regard, we place our reliance on the commentary provided at page no. 1251 of Wadhwa Law Chambers, Volume I, Second Edition, which discusses the legal permissibility and rationale for the CoC's recommendation to replace the existing Resolution Professional with an IPE, thereby reinforcing the validity of the CoC's decision in the present case.

In view of the foregoing, this Tribunal hereby passes the following directions: