Tribunal affirms that expiry of insolvency resolution process without approved plan or valid extension mandates liquidation under IBC Section 33(1)(a); subsequent CoC meetings or expressions of interest cannot revive lapsed CIRP
In a significant judgment dated September 30, 2026, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, dismissed the appeal filed by Mr. Rajesh Uttamchandani challenging the order of the National Company Law Tribunal (NCLT), Mumbai Bench, directing the liquidation of M/s Syska E-Retails LLP. The case revolved around the expiry of the Corporate Insolvency Resolution Process (CIRP) period without any approved resolution plan or valid extension, triggering mandatory liquidation under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016 (IBC).
The CIRP for Syska E-Retails LLP commenced on June 17, 2025, following the admission of a Section 7 petition by Canara Bank. A three-member Committee of Creditors (CoC) was constituted, comprising Canara Bank, State Bank of India (SBI), and UV Asset Reconstruction Company Ltd. Despite inviting claims and expressions of interest (EOIs) through Form A and Form G, no compliant resolution plan was approved within the statutory period of 180 days ending December 14, 2025.
At the 7th CoC meeting held on December 10, 2025, two critical resolutions were proposed: one for a 90-day extension of the CIRP period to enable fresh EOIs and issuance of a new Form G, and the other for initiation of liquidation under Section 33 of the IBC. Both resolutions failed to secure the mandatory 66% voting threshold: the extension received 45.16% votes in favor, and liquidation received 54.84% votes in favor. Consequently, the CoC was at a deadlock with no conclusive decision to extend the CIRP or liquidate the corporate debtor.
Post expiry of the CIRP period, fresh EOIs surfaced, including from the appellant who was a suspended partner and claimed financial capability and willingness to submit a resolution plan under the provisions applicable to Micro, Small and Medium Enterprises (MSMEs) under Section 240A of the IBC. The Resolution Professional (RP) convened an 8th CoC meeting on December 29, 2025, where the CoC unanimously authorized the RP to approach the NCLT for directions on whether to extend the CIRP or proceed with liquidation.
Despite these developments, the NCLT, by its order dated January 8, 2026, refused to condone the delay in filing the application after the CIRP expiry and held that the absence of a valid extension and failure to approve any resolution plan mandated liquidation under Section 33(1)(a). The NCLT further appointed the RP as the liquidator, lifted the moratorium, and directed public announcement of liquidation.
Challenging this order, the appellant argued that the CoC's commercial wisdom in the 8th meeting and the fresh EOIs indicated viable prospects for resolution and value maximization, which the NCLT had overlooked. The appellant contended that liquidation was premature and contradicted the IBC's objective of promoting revival over liquidation. Reliance was placed on Supreme Court precedents emphasizing resolution priority and the commercial wisdom of the CoC.
The respondents, including SBI and Canara Bank, contended that the statutory timeline and voting thresholds are mandatory and non-negotiable. They argued that no extension was validly approved, no resolution plan was received, and the CIRP had thus expired. They submitted that the voting deadlock does not constitute a legal deadlock allowing CIRP continuation or revival. The respondents also highlighted the nature of the corporate debtor as a trading entity with no fixed assets, justifying liquidation.
The NCLAT, after detailed analysis, upheld the NCLT's order. The Tribunal emphasized that under Section 33(1)(a), if no resolution plan is received before the expiry of the CIRP period or its maximum permitted extension, the Adjudicating Authority is mandated to order liquidation. The Tribunal clarified that this statutory consequence is automatic and not contingent upon a separate liquidation resolution under Section 33(2). The failure of the liquidation resolution to secure 66% votes in the CoC is immaterial where the CIRP period expires without an approved plan.
The Tribunal further held that subsequent CoC meetings or fresh EOIs after the CIRP expiry cannot revive or extend the process. It rejected the appellant's contention based on Section 240A regarding MSME status as not conferring any independent power to reopen an expired CIRP. The principle of commercial wisdom of the CoC operates strictly within the Code's statutory framework and cannot override mandatory timelines and consequences.
The judgment also noted a procedural lapse where the RP disclosed confidential valuation figures before confidentiality undertakings were in place, constituting a non-compliance with Regulation 35 of the IBBI (CIRP) Regulations. While not delving deeper into this misconduct, the Tribunal remarked that such conduct was unbecoming of a Resolution Professional.
In conclusion, the NCLAT affirmed the liquidation order passed by the NCLT, reinforcing the mandatory nature of the liquidation process upon CIRP expiry without a resolution plan and valid extension. The appeal was dismissed with no order as to costs, and all pending applications and interim orders were disposed of.
This judgment reaffirms the strict adherence to statutory timelines under the Insolvency and Bankruptcy Code, 2016, underscoring that the expiry of the CIRP period without approved resolution plan or extension mandates liquidation, irrespective of subsequent creditor meetings or fresh resolution interests.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Expiry of CIRP period without receipt of resolution plan under Section 30(6) and without valid extension - Liquidation under Section 33(1)(a) is mandatory - Failure of CoC to approve liquidation by 66% under Section 33(2) does not create any legal deadlock nor prevent liquidation under Section 33(1)(a) - Subsequent CoC meeting, fresh EOIs or willingness of MSME/suspended management to submit plan cannot revive expired CIRP.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 - Sections 12, 30(4), 30(6), 33(1)(a), 33(2), 240A; IBBI (CIRP) Regulations, Regulation 35
