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NCLT Hyderabad Replaces Liquidator of for Failing to Enforce Orders
The
, has taken a firm stand against a liquidator who relied solely on emails and notices to enforce court orders, replacing him for failing to take
to recover assets worth over ₹100 crore. The bench, comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri, observed that
"
, by itself, cannot be regarded as
passed by this
."
A Fourth Extension Bid Rejected
The case concerns the liquidation of . The outgoing liquidator, , had moved an application seeking a fourth extension of the liquidation period by six months from . He cited continued by the in handing over the 's documents, records, and assets.
Two specific orders had been passed earlier to address this . An order dated , directed the to contribute ₹1,00,80,42,880.92 towards the assets of the . Another order on , required them to hand over the assets, including plant and machinery.
Emails and Notices, But No Enforcement
The liquidator informed the tribunal that he had contacted the by email on , followed by another communication on , and a notice on . He also noted that the directors had filed an application seeking recall of the April 9 order.
However, the tribunal found that almost one and a half years had passed since the orders were issued, yet the record did not disclose any effective or
taken for their execution.
"No material has been placed before us to demonstrate that any such
was taken during the period that has elapsed,"
the bench observed.
The tribunal rejected the argument that by directors justified . It noted that the responsibility for conducting the liquidation within the rests with the liquidator and cannot be shifted to the . The pendency of a also did not justify inaction, as no had been granted on the operation of the orders.
Replacement and Fresh Directions
The bench concluded that continuing with the existing liquidator would not be conducive to the of the . It directed his replacement with , an -registered .
At the same time, the tribunal recognized that certain assets were yet to be taken into custody and substantial amounts remained to be recovered. It therefore extended the liquidation period by six months from , to allow the new liquidator to complete the remaining process.
The newly appointed liquidator has been directed to: - Secure of all assets, including plant and machinery - Take all necessary steps for enforcement and execution of the earlier orders - Recover the ₹1,00,80,42,880.92 - Complete the remaining expeditiously within the extended period
Key Observations from the Judgment
" , by itself, cannot be regarded as passed by this ."
"An cannot serve its purpose unless the Liquidator takes for securing its implementation."
"The cannot be permitted to continue indefinitely by seeking on ."
The decision underscores that liquidators must take beyond mere correspondence, and that the NCLT will not hesitate to replace those who fail to do so. It also clarifies that by does not absolve the liquidator of the duty to take lawful steps to implement court orders.
