Case Overview
This order pertains to an Interlocutory Application (IA(LIQ.)/62/2024) filed by Mr. Vikas Khiyani, the Resolution Professional (RP) of Shri Vaijanath Industries Private Limited (Corporate Debtor), under Section 33 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 06 June 2023, pursuant to a petition filed by M/s. Kamal Metal Corporation (Operational Creditor) under Section 9 of the IBC. The CIRP was initiated due to an operational debt default.
The RP constituted a Committee of Creditors (CoC) with two members: Kamal Metal Corporation (claim admitted: ₹17,864,899; 91.74% voting share) and the Income Tax Department (claim admitted: ₹1,608,250; 8.26% voting share). The total admitted claims amounted to ₹19,473,149. During the CIRP, the suspended directors of the Corporate Debtor informed the RP that the company's assets had already been auctioned by Union Bank of India. The RP concluded that revival was not feasible as the Corporate Debtor had ceased operations and was no longer a going concern.
In its second meeting held on 17 November 2023, the CoC, by a 91.75% majority vote, passed a resolution approving the liquidation of the Corporate Debtor and authorized the RP to file the liquidation application. The CoC also ratified the CIRP costs of ₹855,950 (plus applicable taxes) incurred up to the filing of the liquidation application.
The Adjudicating Authority noted that the prescribed 180-day CIRP period expired on 03 December 2023, no extension was sought, and no resolution plan was received under Section 30(6) of the IBC. The Tribunal analyzed the provisions of Section 33 of the IBC, which mandates liquidation if no resolution plan is received within the CIRP period or if the CoC resolves to liquidate with a 66% majority.
Final Outcome
The NCLT allowed the application and ordered the liquidation of Shri Vaijanath Industries Private Limited under Section 33(2) of the IBC. However, citing the Insolvency and Bankruptcy Code (Amendment) Act, 2026 (effective 26 May 2026), which prohibits the appointment of the RP as the Liquidator, the Tribunal rejected the prayer to appoint Mr. Vikas Khiyani as the Liquidator. Instead, it appointed Mr. Neehal Mahamulal Pathan (IBBI Registration No. IBBI/IPA-001/IP-P-01561/2018-2019/12406) as the Liquidator. The Liquidator is directed to initiate the liquidation process, take control of the Corporate Debtor's assets, issue a public announcement, and submit a preliminary report within 30 days. A fresh moratorium commences under Section 33(1)(iv) of the IBC.
Topics: Insolvency, Liquidation, NCLT Order