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Pending IAs Do Not Bar Liquidation Under IBC: NCLT Mumbai Orders in European Projects Case
The , has clarified that the pendency of concerning a corporate debtor's affairs does not prevent the . The ruling came while ordering the liquidation of under .
A bench of Judicial Member Vinay Goel and Technical Member Charanjeet Singh Gulati observed that such pending applications can instead be pursued by the liquidator in accordance with law. The decision underscores the tribunal's approach when a company has ceased operations and no has emerged.
A Company with No Revenue Since 2012
The insolvency process was triggered by a petition filed by , a financial creditor, on , under Section 7 of the IBC. The petition was admitted on , and Mr. Manoj Kumar Jain was appointed as the . He was later replaced by Mr. Laxmikant Yeshwant Desai as the .
During the , which expired on , the found that European Projects & Aviation had no business revenue or income since financial year 2012. The company had no employees, no fixed assets, and no patents. It had also received no interest from any prospective resolution applicant.
CoC Voted Unanimously for Liquidation
At its fourth meeting on , the CoC approved the initiation of . The fifth meeting on , formalized the decision with a 100% voting share resolution authorising the RP to file the necessary application. The CoC also resolved to propose the RP as the liquidator.
The RP accordingly filed IA(LIQ.)/80/2025 under Section 33(2) of the IBC, seeking liquidation and his own appointment as liquidator.
Legal Analysis: Section 33(1) vs. Section 33(2)
The tribunal distinguished between the two limbs of Section 33. Under Section 33(1), liquidation is mandatory when no is received before the CIRP expiry or if a plan is rejected for non-compliance. Section 33(2) applies when the CoC decides by at least 66% voting share to liquidate during the CIRP but before plan approval. In this case, the 100% vote satisfied the condition for invoking Section 33(2).
The bench rejected the RP's prayer to be appointed as liquidator, citing the , effective , which bars the same Resolution Professional from acting as liquidator. Instead, it appointed Mr. Sandeep D. Maheshwari from the panel as the liquidator.
Key Observations
The tribunal made two notable observations. First, regarding pending applications: “Though certain relating to the affairs of the Corporate Debtor are stated to be pending, the same would not preclude the and may be pursued by the Liquidator in accordance with law.”
Second, it noted the company's complete lack of business activity: “the Corporate Debtor had no business revenue or income since FY 2012, has no employees, staff, fixed assets, or patents, and has received no interest from any Prospective Resolution Applicant.”
Decision and Implications
The tribunal ordered the liquidation of under Chapter III of the IBC. The liquidator was directed to take control of assets, initiate proceedings for , issue a , and submit a within 30 days. A fresh was imposed, and the order acts as a to the company's officers, employees, and workmen.
The judgment reinforces that insolvency proceedings can move to liquidation even when side applications remain unresolved, and it clarifies the amended law requiring a new insolvency professional for liquidation, preventing the same RP from continuing in a different capacity.
