NCLAT: Liquidation is mandatory when CIRP expires without a plan or valid extension, even if the CoC is deadlocked

The CIRP of Syska E-Retails LLP commenced on 17 June 2025.

In the CoC’s 7th meeting, neither the proposal to extend the CIRP by 90 days nor the proposal for liquidation obtained the required 66% voting share; no compliant resolution plan had been received, and the CIRP period expired on 14 December 2025.

After expiry, the Appellant, a suspended partner of the Corporate Debtor, and another prospective applicant expressed interest in submitting plans. At its 8th meeting on 29 December 2025, the CoC authorised the Resolution Professional to seek directions from the NCLT on the way forward.

The NCLT declined to condone the delay and ordered liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 (“IBC”). The Appellant appealed, seeking to set aside that order and obtain an opportunity to continue the resolution process.

1. Whether, after expiry of the CIRP period without receipt of a resolution plan under Section 30(6) and without a valid extension, the Adjudicating Authority could defer liquidation because the CoC had not approved liquidation by the requisite majority and later sought directions on the way forward.

2. Whether post-expiry expressions of interest, the CoC’s later resolution to seek directions, or the Appellant’s eligibility under Section 240A could revive or extend the expired CIRP.

Section 33(1)(a) of the IBC requires the Adjudicating Authority to order liquidation where, before expiry of the insolvency resolution process period or the maximum period permitted under Section 12, it has not received a resolution plan under Section 30(6).

An extension must be obtained in accordance with the Code and its prescribed voting requirements; absent a valid extension, the CIRP cannot continue beyond the statutory period.

Liquidation under Section 33(2), which follows a CoC decision to liquidate, is distinct from liquidation mandated by Section 33(1)(a); therefore, failure of a separate CoC liquidation resolution does not prevent the latter where its statutory conditions are met.

Section 240A does not create an independent power to revive an expired CIRP, and the CoC’s commercial wisdom cannot override the Code’s statutory requirements.

The judgment did not rely on the precedents cited by the Appellant.

The NCLAT held that, when the 180-day period expired on 14 December 2025, no resolution plan had been received within the prescribed period and no valid extension had been approved.

The CoC’s later meeting and the expressions of interest received after expiry could not revive the CIRP or satisfy the statutory requirement for a timely plan.

Nor did the failure of the separate liquidation proposal to obtain 66% support create a legal deadlock: the liquidation order was based on Section 33(1)(a), not on a CoC resolution under Section 33(2).

The objective of resolution and value maximisation could not displace the consequence prescribed by the Code.

Separately, the Tribunal observed that disclosure of the fair and liquidation values without the required confidentiality safeguards was non-compliant with Regulation 35 and criticised the Resolution Professional’s conduct, while stating that it was not determining alleged misconduct.

It dismissed the appeal and affirmed the NCLT’s liquidation order, vacated any interim stay, and made no order as to costs.