Peejay Finance Company Limited Vs V.S. Matrix Pvt. Ltd (NCLT Delhi)
Background and Initiation of CIRP:
M/s Peejay Finance Company Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before the NCLT Delhi to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s V.S. Matrix Pvt. Ltd. The Adjudicating Authority admitted the application on 30.08.2019, declared a moratorium, and appointed Mr. Vineet Aggarwal as the Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors (CoC) appointed him as the Resolution Professional (RP). During the CIRP, disputes arose over the admission of certain claims, particularly that of Mr. Rajiv Aggarwal, which impacted the voting shares within the CoC.
Replacement of Resolution Professional:
IDBI Bank Limited and another financial creditor filed separate applications seeking the removal of the erstwhile RP. Following regulatory intervention, including suspension by the Insolvency and Bankruptcy Board of India (IBBI) in March 2023, the Adjudicating Authority replaced Mr. Vineet Aggarwal with Mr. Bimal Kumar Sharma as RP on 24.05.2023. At the time of appointment, the CIRP period under Section 12 had already expired. Mr. Sharma filed his consent and initiated steps to recommence CIRP de novo, as directed by the NCLT, including exclusion of prior periods and extension of the CIRP period.
CIRP Developments Under New RP:
Mr. Sharma conducted multiple CoC meetings to approve exclusion of prior periods (from 30.08.2019 to 13.07.2023 and from 10.10.2023 to 19.02.2024) and extensions of the CIRP. Resolutions were passed by significant voting shares, though some members, including IDBI Bank, abstained or raised objections. Public announcements were made for claim submission and Expressions of Interest under Regulation 36A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Despite these efforts, no resolution plans were submitted, and recovery of the Corporate Debtor’s sole asset at 486, Patparganj Industrial Area, Delhi, remained pending due to non-cooperation from certain stakeholders.
Liquidation Application by IDBI Bank:
IDBI Bank, a secured financial creditor, filed I.A. (Liq.) No. 11 of 2025 under Section 33(1)(a) read with Section 60(5) of the Code, seeking liquidation of the Corporate Debtor. The bank argued that CIRP had expired, no resolution plan had been received, and the ongoing process was financially burdensome with erosion of the insolvency estate. It proposed the appointment of Mr. Rahul Jindal as Liquidator.
RP’s Opposition and Extension Application:
The RP opposed liquidation, explaining that the CIRP had been recommenced de novo by NCLT on 10.10.2023 after his appointment and that ongoing proceedings, including I.A. No. 3151 of 2024 for recovery of the sole asset, were pending. The RP highlighted that the CoC repeatedly rejected liquidation proposals and emphasized that Section 12 allows CIRP extension by 90 days with CoC approval. He filed I.A. No. 5765 of 2024 seeking a 90-day extension from 14.11.2024 to complete CIRP.
Judicial Analysis:
The NCLT carefully examined the timeline, noting that the CIRP had commenced on 30.08.2019, faced procedural disruptions, and was recommenced de novo on 10.10.2023. Despite extensions and exclusions, no resolution plan was received by the final CIRP expiry on 14.11.2024. The Tribunal emphasized that Section 33(1)(a) of the IBC is mandatory: upon expiry of the CIRP period without receipt of a resolution plan, liquidation must follow. While the RP argued for extension and pending asset recovery, the statutory mandate under Section 33(1)(a) could not be overridden. The Tribunal observed that pending applications for asset recovery or extensions cannot prevent the automatic application of Section 33(1)(a) once the CIRP period lapses without a resolution plan.
Precedents Considered:
