Adjudicating Authority Must Pass Liquidation Order U/S 33(4) Of IBC Upon Breach Of Resolution Plan By Successful Applicant: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Lakshmi Gurung (Member Judicial) and Hariharan Neelakanta Iyer (Member Technical) has held that once the Successful Resolution Applicant fails to comply with the terms of the Resolution Plan despite several reminders being given, the Adjudicating Authority is mandated to pass an order of liquidation under section 33(4) of the IBC. The present application has been filed under section 33(3) of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Secured Creditor of the Corporate Debtor seeking liquidation of the Corporate Debtor due to non-compliance with the conditions of the Resolution Plan by the Successful Resolution Applicant (SRA). The Applicant submitted that despite several reminders given to the SRA with respect to the implementation of the Resolution Plan, no response was given by the SRS thereby prompting the Applicant to file the present application. Per contra, the Respondent submitted that the SRA has made substantial efforts to comply with the terms and conditions of the resolution plan and has not intentionally contravened them. Due to unexpected and unforeseen circumstances, SRA is facing difficulties in re-paying dues of both financial and operational creditors as per the resolution plan. The Tribunal observed that in the present case the SRA has contravened the terms of the Resolution Plan which was approved by the Adjudicating Authority by failing to make the payment to the financial creditor within the stipulated time frame. The Supreme Court in Arcelormittal India versus Satish Kumar Gupta held that liquidation under Section 33 can be triggered not just by failure to get a plan, but also if a confirmed plan is breached. In light of the above judgment, the Tribunal held that once the conditions of the Resolution Plan are contravened, the Adjudicating Authority is mandated to pass an order of liquidation of the corporate debtor under section 33(4) of the IBC, leaving no scope of leniency towards the SRA or the corporate debtor. Accordingly, the present application was disposed of. Case Title:Janaseva Sahakari Bank Limited Versus Ravindra P. Birole Case Number: I.A. 4426/2024 IA(IBC)(LIQ.) 81/2024 In C.P. (IB)/2476(MB)2018 Judgment Date: 07/07/2025 Click Here To Read/Download The Order

Adjudicating Authority Must Pass Liquidation Order U/S 33(4) Of IBC Upon Breach Of Resolution Plan By Successful Applicant: NCLT Mumbai

Mohd Malik Chauhan

Tags