NCLT Hyderabad Holds Ex-KVK Nilachal Liquidator In Contempt For Not Disclosing Contractor Equipment To Bidders

The National Company Law Tribunal (NCLT) at Hyderabad has recently held Rajendra Prasad Tak, the former liquidator of KVK Nilachal Power, guilty of civil contempt for deliberately ignoring its directions on third party equipment that had been kept outside the liquidation estate. A coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri, in an order dated December 3, 2025, said the liquidator's failure to facilitate removal of the equipment and his decision to proceed with the sale of the corporate debtor without disclosing its existence amounted to wilful disobedience. “In our considered view, the conduct of the Liquidator satisfies the statutory requirement of wilful and deliberate disobedience under Section 2(b) of the Contempt of Courts Act, 1971,” the tribunal said. The dispute played out during the liquidation of KVK Nilachal Power Pvt Ltd, which entered insolvency in September 2019 on a petition by Power Finance Corporation Ltd. After creditors opted for liquidation, the tribunal passed a liquidation order in December 2020 and appointed Rajendra Prasad Tak as liquidator. At the Odisha project site, Teknow Overseas Private Limited, which had been engaged for chimney construction, had deployed specialised slipform equipment of its own. Construction stopped in 2012 following orders of the Orissa High Court, leaving the machinery at the site. During the liquidation, Teknow approached the tribunal seeking permission to remove its equipment from the project site. In December 2021, the tribunal allowed the request, after observing that the machinery did not belong to the corporate debtor. It directed the liquidator to cooperate in dismantling and handing it back. Teknow later told the tribunal that despite this clear order, the liquidator did not take effective steps to ensure that the equipment was removed. It also said the liquidator went ahead with the e-auction sale of the company in 2022 without disclosing the presence of third party machinery, which later allowed the auction purchaser to claim ownership over assets that had already been judicially recognised as belonging to Teknow. The tribunal agreed. It found that the liquidator was fully aware of the December 2021 order but consciously chose not to act on it. “The Liquidator neither ensured removal of the Applicant's equipment prior to issuance of the E Auction Process Information Document nor disclosed the existence of the Applicant's third party equipment to the bidders at any stage,” the tribunal said. “These omissions were not mere procedural lapses but constituted conscious disregard of binding directions of this Authority.”, it added. Holding that wilful disobedience was clearly established, the tribunal directed the former liquidator to appear in person on March 18, 2026, and explain why action should not be taken against him under the Contempt of Courts Act. Case Title: Teknow Overseas Pvt Ltd vs Orissa Thermal Energy Ltd, Rajendra Prasad TakCase Citation: 2026 LLBiz NCLT (HYD) 14Case Number: IA (IBC) No. 933/2024 in IA (IBC) No. 865/2020For Applicant: Advocate Krishna ManoharFor Liquidator: Advocates Abhishek Anand, Karan KohliFor Successful Bidder: Advocate Vinitha ReddyClick Here To Read/Download Order

NCLT Hyderabad Holds Ex-KVK Nilachal Liquidator In Contempt For Not Disclosing Contractor Equipment To Bidders

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NCLT Hyderabad Holds Ex-KVK Nilachal Liquidator In Contempt For Not Disclosing Contractor Equipment To Bidders

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