Non-Cooperation by Management: NCLT Upholds CoC Vote for Liquidation After Failed CIRP

The article reports a case where the National Company Law Tribunal (NCLT) upheld the Committee of Creditors’ (CoC) decision to liquidate a company after its Corporate Insolvency Resolution Process (CIRP) failed due to non-cooperation by management. The CoC, with a 92.53% majority, voted for liquidation as no viable resolution plan was received within the IBC timelines. The Tribunal reiterated that once the statutory time limit for CIRP expires and there is no approved plan, liquidation becomes mandatory. It also emphasised that CoC’s commercial wisdom prevails unless procedural lapses or mala fides are shown. The article underlines that management’s lack of cooperation, such as non-submission of records or obstruction, can lead directly to liquidation. The decision reinforces the principle that CIRP cannot be indefinitely prolonged and ensures creditor protection under the Insolvency and Bankruptcy Code.