SBI (SAM Branch) vs M/s. Vibha Agro Tech Limited

The Interlocutory Application is filed by the Resolution Professional seeking initiation of liquidation of the Corporate Debtor i.e. M/s Vibha Agro Tech Limited under Section 33(1) of the Insolvency and Bankruptcy Code, 2016, along with a direction to the Committee of Creditors (CoC) to bear the liquidation costs in proportion to their respective voting shares in the COC.

The Corporate Insolvency Resolution Process (CIRP) was commenced pursuant to admission of an application under Section 7 filed by State Bank of India against the Corporate Debtor on 05.06.2023. Subsequently, the present Resolution Professional Shri Madasa Kumar was appointed on 22.12.2023 replacing Mr. Ram Ratan Kanoongo.

Although an initial resolution plan under IA (IBC) Plan 11/2024 submitted by M/s Vasavi Realty Private Limited was approved by the CoC and pending consideration by this Tribunal, the Suspended Directors and the All-Indian Kisan Sabha filed IAs No. 1402, 1403, 1404 of 2024 and 1428 and 1429/2024 challenging the CIRP on 04.07.2024, the IA Nos 1428 & 1429/2024 were disposed of with the following directions on 21.02.2025

On 21.02.2025, the Tribunal ordered a fresh Public Announcement (Form-A) and directed the completion of the CIRP within a maximum of 180 days. In compliance thereto, a fresh Form-A was issued on 27.02.2025 in multiple regional and national newspapers with a claim deadline of 07.03.2025.

The Applicant after collating and verifying the claims, constituted the COC on 22.03.2025. Subsequently, Form G was published on 29.04.2025.

It is submitted that pursuant to publication of Form G on 29.04.2025, the Suspended Director, Mr. Paruchuri Vidyasagar, submitted an Expression of Interest on 14.05.2025, asserting that the Corporate Debtor qualifies as an MSME. He further informed the Resolution Professional that he has challenged his classification as a wilful defaulter before the Hon’ble High Court by filing multiple writ petitions, wherein, by order dated 07.05.2025, the Court directed that any action taken pursuant to the impugned classification would be subject to the outcome of the writ petitions.

During the extended CIRP, 13 expressions of interest were received apart from the EOI submitted by the Suspended Director of Corporate Debtor. However, only two resolution plans i.e. Rare Asset Reconstruction Limited and Mr. Paruchuri Vidyasagar, were finally received by the Resolution Professional. Both plans were rejected by the CoC in the 9^th COC meeting held on 14.08.2025 as they did not comply with the provisions of the Code and the RFRP conditions, including one on account of ineligibility under Section 29A.

Aggrieved by the rejection of his Resolution Plan, Mr. Paruchuri Vidyasagar, Suspended Director of the Corporate Debtor, filed I.A. No. 3 of 2025 in W.P. No. 11743 of 2025 before the Hon’ble High Court, seeking stay of the operation of the wilful defaulter declaration and a direction to the Resolution Professional to consider the Resolution Plan submitted by him.

In light of the 90-day extension granted by this Tribunal on 21.08.2025, the Resolution Professional, acting on the decision of the CoC, issued a fresh publication of Form G on 03.09.2025.

The Applicant conducted the 11^th COC meeting on 22.09.2025. The Committee of Creditors resolved to consider the Expression of Interest submitted by the Suspended Director, subject to the condition that he would become eligible to submit a resolution plan only upon setting aside of his wilful defaulter classification by the Hon’ble High Court on or before 28.09.2025.

In the 12^th COC meeting, the Applicant apprised the COC that he has received two resolution plans, one from M/s Verity Knowledge Solutions Private Limited and the other from Mr. Parcuhuri Vidya Sagar, Suspended Director. The Resolution Plan submitted from the Suspended Director was rejected by the COC on the ground that Writ Petitions filed by him before the Hon’ble High Court were dismissed and he is ineligible under Section 29A. The resolution plan submitted by M/s Verity Knowledge Solution Private Limited, failed to secure the requisite voting threshold of 66% of the CoC.

In these circumstances, with the failure of the resolution process and expiry of 330 days CIRP period, the Resolution Professional has sought liquidation of the Corporate Debtor in accordance with the provisions of the Code.

Further, it is submitted that as the CIRP of the Corporate Debtor is expiring on 11.02.2026, the Resolution Professional is unable to convene any further meeting of the Committee of Creditors, and consequently, the Applicant and the CoC are not in a position to take decisions in terms of Regulations 39B (Meeting Liquidation Cost) and 39D (Fee of the Liquidator) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

We heard the submissions of the Resolution Professional and perused the material on record.

It is noted that despite issuance of Form G and receipt of several Expressions of Interest, only few resolution plans were received. The said plans were placed before the CoC for its consideration. However, no resolution plan could be approved with the requisite voting share of 66% as required under Section 30(4) of the Code. Further, the resolution plan submitted by the Suspended Director was rejected in view of his ineligibility under Section 29A of the Code, which position stood confirmed upon dismissal of the writ petitions filed by him.

We have gone through the minutes of the 16^th meeting of the COC held on 06.01.2026, wherein the following resolutions were passed: -

It is further noted from the minutes of the 16^th COC meeting that the COC was requested to recommend an Insolvency Professional for appointment as Liquidator. The COC decided that SBI, as the lead banker, would convene a Joint Lenders’ Meeting (JLM) to take a decision on the matter. However, the SBI till date have not proposed any IP to act as Liquidator in this matter.

It is also evident that the CIRP period, including all extensions, has come to an end and the maximum period of 330 days prescribed under Section 12 of the Code has expired. In such circumstances, and in view of the decision of the CoC to initiate liquidation, this Tribunal has no other option but to pass an order for liquidation of the Corporate Debtor under Section 33(1) of the Code.

Accordingly, we allow this Application, directing the liquidation of the Corporate Debtor as under: -