Tribunal cites lack of transparency and suspicious conduct in the insolvency process; appoints liquidator to oversee proceedings.
In a significant ruling, the National Company Law Tribunal (NCLT), New Delhi, has rejected the resolution plan for APS Infra Engineers Private Limited, ordering the liquidation of the company. The decision, delivered by Judicial Member Mr. Ashok Kumar Bhardwaj and Technical Member Mr. Atul Chaturvedi on July 10, 2026, was based on findings of a lack of transparency, suspicious conduct, and questionable treatment of creditors during the Corporate Insolvency Resolution Process (CIRP).
The tribunal was approached by Mr. Arvind Mittal, Resolution Professional for APS Infra Engineers, seeking approval for the resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016. The plan had previously been approved by the Committee of Creditors (CoC) with a 100% voting share. However, the NCLT found irregularities in the claims invitation and distribution process, with certain creditors being excluded from the CoC despite provisions for their payments in the plan.
The tribunal noted that the conduct during the CIRP was suspicious and nebulous, particularly in the handling of claims from financial creditors such as Kotak Mahindra Bank and Axis Bank Limited. These banks were not included in the CoC, yet the resolution plan provided for payments to them. This lack of inclusion raised concerns about the transparency and fairness of the process.
The NCLT's order for liquidation includes the appointment of Mr. Yuvraj Tiwari as the liquidator, who is tasked with conducting the liquidation in accordance with the Insolvency and Bankruptcy Code, 2016, and related regulations. The liquidator is directed to investigate the financial affairs of APS Infra Engineers and submit a preliminary report within 75 days. The order also mandates the continuation or institution of proceedings related to avoidance transactions or fraudulent trading.
The tribunal emphasized that while the CoC has the option to restore the CIRP under amended provisions, such restoration must include all financial creditors. This reflects an effort to ensure a fair and comprehensive resolution process that accounts for the interests of all stakeholders.
The rejection of the resolution plan and subsequent order for liquidation highlight the NCLT's commitment to ensuring transparency and fairness in insolvency proceedings, safeguarding the interests of all creditors involved.
Bottom line:-
Resolution Plan under Insolvency and Bankruptcy Code, 2016 - Rejection of Resolution Plan due to lack of transparency, suspicious conduct, and questionable treatment of creditors - Order for liquidation of Corporate Debtor passed in light of irregularities.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 30(6), 31, 33, 35, 36, 178, 33(1A).
