Case Details
Case Name: CP(IB) No. 645/7/HDB/2018, IA (IBC) (Liq.,) 01/2026 & connected applications
Parties: SBI (SAM Branch) (Financial Creditor) vs. M/s. Vibha Agro Tech Limited (Corporate Debtor); Mr. Vidyasagar Parchuri (Applicant) vs. Mr. Madasa Kumar (RP) & Committee of Creditors (Respondents)
Court/Authority: National Company Law Tribunal (NCLT), Hyderabad Bench – 1
Coram: Shri Rajeev Bhardwaj (Member-Judicial), Shri Sanjay Puri (Member-Technical)
Order Date: 22 May 2026
Period of CIRP: Initiated on 05 June 2023, CIRP period ended on 11 February 2026 (exceeding 330-day limit).
Parties Involved
Petitioner/Applicant: Mr. Vidyasagar Parchuri, suspended director of Vibha Agro Tech Ltd.
Respondents:
1. Mr. Madasa Kumar, Resolution Professional (RP) of Vibha Agro Tech Ltd.
2. Committee of Creditors (CoC) represented by the RP
Financial Creditors in CoC: State Bank of India (lead bank), Reliance ARC, Punjab National Bank, IDBI Bank (aggregate voting share 70.41%)
Counsels: Mr. Paras Mitha (for Applicant); Mr. G.P. Yash Vardhan (for RP); Mr. Madasa Kumar (RP appeared in person)
Issues / Allegations / Violations
The Applicant (suspended director) challenged the liquidation application (IA (IBC) (Liq.) 01/2026) filed by the RP, alleging:
- Liquidation was not approved by requisite 66% voting share of CoC
- Non-compliance with mandatory Regulations 39B to 39D of IBBI (CIRP) Regulations, 2016
- Failure to examine possibility of compromise/arrangement under Section 230 of Companies Act, 2013 as mandated by Regulation 39BA
- Extinguishment of statutory rights under Section 230 due to Regulation 2B of Liquidation Regulations
- MSME status of corporate debtor entitled promoter to participation in revival mechanisms
Findings & Observations
The Tribunal found:
- The case falls under Section 33(1)(a) of IBC as no resolution plan was approved within CIRP period (330 days exhausted by 11 February 2026)
- In 16th CoC meeting, resolution plan from M/s Verity Knowledge Solutions Pvt Ltd failed to secure 66% voting share
- CoC simultaneously resolved to initiate liquidation and authorized RP to file application
- Applicant was classified as wilful defaulter by SBI, IDBI and PNB, making him ineligible under Section 29A(b) of IBC
- Writ petitions (WP Nos.11567/2025, 11615/2025, 11743/2025) challenging wilful defaulter status were dismissed by Telangana High Court on 01 December 2025 (writ appeals pending)
- MSME exemption under Section 240A doesn't override Section 29A(b) ineligibility for wilful defaulters
- CoC deliberated Regulation 39BA requirements in 18th meeting but resolved not to recommend compromise due to promoter ineligibility under Regulation 2B of Liquidation Regulations
- Commercial wisdom of CoC is not justiciable (citing Supreme Court in K. Shashidhar v. Indian Overseas Bank and Torrent Power Limited v. Ashish Arjunkumar Rathi)
Penalties / Settlements / Directions
- No monetary penalties imposed in this order
- The application IA (IBC) No. 493/2026 filed by the suspended director was dismissed
- The liquidation application (IA (IBC) (Liq.) 01/2026) was upheld as valid
- CoC had recommended Mr. Maligi Madhusudhan Reddy as Liquidator (to be formalized separately)
Corrective Actions & Future Obligations
- Liquidation process to proceed under Section 33 of IBC
- RP to take necessary steps for formal appointment of liquidator
- No future obligations imposed on the applicant director
Final Ruling & Enforcement
The Tribunal dismissed the applicant's challenge and upheld the liquidation proceedings, finding:
- Applicant had locus standi to file application (citing Supreme Court in Kalyani Transco v. Bhushan Power & Steel Ltd.)
- However, claims lacked merit as liquidation was properly initiated under Section 33(1)(a)
- CoC complied with required procedures and regulations
- Commercial decision of CoC to reject OTS proposals and pursue liquidation was not subject to judicial interference
- The order is immediately enforceable, allowing liquidation proceedings to continue