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Judgment
The case is fixed for pronouncement of the order. The order is pronounced in open Court vide separate sheet.
The present Application has been filed by the Resolution Professional, Mr. Mohd. Raees Sheikh (Applicant), under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 r.w. Rule 11 of the NCLT Rules, 2016, seeking directions for termination of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, M/s Shirani Motors Pvt. Ltd., on the grounds that no assets are available for realization and the Committee of Creditors (CoC) has not taken any decision on crucial agenda items despite several meetings.
The facts of the case are that the Corporate Debtor (CD) had filed an petition under Section 10 of the IBC in the main matter of C.P.(IB)/36 of 2021, which was admitted vide order dated 14.10.2024. The Applicant was appointed as the Interim Resolution Professional (IRP) and subsequently confirmed as the Resolution Professional (RP) in the 1st CoC meeting.
The Applicant issued a Public Announcement in compliance with Regulation 6 of the CIRP Regulations on 17.10.2024. Claims were invited and the process was carried out as per law. The CoC meetings were conducted on 15.11.2024, 13.12.2024, 08.01.2025, and 07.11.2025. However, despite repeated efforts of the RP, the CoC members neither considered nor voted upon the agenda items placed before them, including publication of Form-G for inviting resolution plans.
On examination of the financials, bank statements and records, it was revealed that the Corporate Debtor has not carried on any business since 2022, has no assets as on the Insolvency Commencement Date, and there are no avoidance transactions to be pursued.
The Applicant had earlier filed IA 259 of 2025 seeking necessary directions; however, during its hearing, it was indicated that instead of dissolution, appropriate relief would be termination of CIRP. Accordingly, the present Application has been filed.
Learned Counsel for the Applicant submitted that continuation of the CIRP would be a futile exercise in the absence of assets, operations, or any possibility of resolution. The CoC has not exercised its commercial wisdom despite several opportunities, leaving the process at a deadlock.
It is prayed that the CIRP may be terminated, and necessary directions be issued for contribution and payment of unpaid CIRP costs by the members of the CoC as per Regulation 33 and 34 of the CIRP Regulations.
We have heard the submissions and perused the records. The facts on record indicate that the Corporate Debtor has no assets or ongoing business operations. The CoC has failed to exercise its powers under Section 30(4) of the Code by not voting on agenda items despite repeated opportunities. Continuation of the CIRP in such circumstances would be contrary to the scheme and object of the Code, which is to maximize the value of assets of the Corporate Debtor.
The Hon'ble NCLAT in K.S. Oils Ltd. v. State Bank of India (Company Appeal (AT) (Insolvency) No. 296 of 2018) held that where there are no assets or operations, continuation of CIRP serves no purpose and proceedings may be terminated. Similarly, in M/s. Valentine Maritime (Gulf) LLC v. Emas Offshore Ltd. [Company Appeal (AT) (Insolvency) No. 164 of 2019], it was held that if no resolution plan is possible and the CoC remains inactive, the Adjudicating Authority may exercise inherent powers under Section 60(5) r.w. Rule 11 to terminate CIRP.
The Hon'ble Delhi High Court in Shailendra Sharma v. Ercon Composites (2021 SCC OnLine Del 4535) observed that where the CIRP is rendered infructuous due to absence of assets, the NCLT has jurisdiction to terminate proceedings rather than unnecessarily prolong them. It is also relevant to note that Regulation 33(3) and 34 of the CIRP Regulations mandate that if the CoC fails to ratify expenses, the same shall be borne by the members of the CoC.
In light of the above discussion and precedents, this Tribunal is of the considered opinion that no fruitful purpose would be served by continuing the CIRP of the Corporate Debtor. Accordingly, the following directions are issued:
The CIRP of M/s Shirani Motors Pvt. Ltd. is hereby terminated forthwith.
The Applicant/RP shall file necessary closure report with the IBBI.
The members of the CoC are directed to contribute towards the CIRP costs and the unpaid fees/expenses of the Applicant, as required under Regulation 33 and 34 of the CIRP Regulations, within four weeks of this order.
The Applicant shall maintain proper accounts of CIRP costs and submit the same to IBBI and CoC for records.
In view of the above terms, IA No. 325 of 2025 stands allowed and disposed of.