NCLT orders liquidation after expiry of CIRP period

Background

The Division Bench of the National Company Law Tribunal, Ahmedabad (Court–I), has ordered the liquidation of Torque Automotive Private Limited under Section 33 of the Insolvency and Bankruptcy Code, 2016, after holding that no resolution plan was approved within the maximum permissible Corporate Insolvency Resolution Process (CIRP) period. The Bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, passed the order on an application filed by the Resolution Professional, Mr. Kamal Agarwal, pursuant to earlier directions issued by the Tribunal. The CIRP, which commenced on 24 February 2021 on a petition filed by Sampati Securities Limited under Section 7 of the Code, witnessed multiple extensions, litigation before the NCLAT and the Supreme Court, and several attempts at revival through fresh invitations for resolution plans. Despite receipt of expressions of interest and submission of multiple resolution plans, none could be approved by the Committee of Creditors (CoC) within the extended timelines. The Tribunal noted that even after rare and exceptional extensions granted in the interest of revival, the CIRP ultimately expired on 18 April 2025 without approval of any resolution plan, making liquidation the inevitable statutory consequence.

Liquidator appointed; moratorium under Section 33(5) imposed

While allowing the liquidation application, the NCLT appointed Mr. Pankaj Prabhudayal Goenka as the Liquidator, observing that the Authorisation for Assignment of the proposed liquidator named by the CoC had expired. The Tribunal declared that the moratorium under Section 14 of the Code stood ceased and imposed a fresh moratorium under Section 33(5), prohibiting institution or continuation of proceedings against the corporate debtor during liquidation.

The Bench directed the Liquidator to take immediate charge of the assets, books, and records of the corporate debtor, issue a public announcement, submit a preliminary report within 75 days, and carry out the liquidation strictly in accordance with Chapter III of the Code and the IBBI (Liquidation Process) Regulations, 2016. All powers of the board of directors and management were ordered to vest in the Liquidator.