NCLT Orders Liquidation Of Hero Electric Vehicles After Resolution Plans Fail To Secure CoC Approval

The National Company Law Tribunal (NCLT), New Delhi Bench, has ordered the liquidation of Hero Electric Vehicles Pvt. Ltd. after no resolution plan received the mandatory voting approval from the Committee of Creditors (CoC) within the stipulated insolvency resolution period.

The order was passed by a bench comprising Judicial Member Bachu Venkat Balaram Das and Technical Member Reena Sinha Puri on March 3, 2026, while allowing an application filed by the Resolution Professional (RP) under Section 33(1) of the Insolvency and Bankruptcy Code (IBC).

Tribunal cites statutory trigger for liquidation

The tribunal, in its order copy, observed, “This Adjudicating Authority notes that the statutory trigger under Section 33(1)(a) of the IBC is the non-approval of a resolution plan within the prescribed CIRP period.

In the present case, despite multiple rounds of Form-G, receipt of resolution plans, negotiations, and re-voting under Regulation 39(3B), no plan secured the requisite 66% voting share, and the CIRP period, including all extensions, expired on 13.02.2026 without any approved resolution plan being placed before this Adjudicating Authority.

“It is well settled that a separate resolution of the CoC approving liquidation by 66% voting share is not a pre-condition for ordering liquidation under Section 33(1)(a) once the CIRP period has so expired.

In these circumstances, any further continuation of the CIRP would serve no useful purpose and would only perpetuate a deadlock, thereby defeating the time-bound object of the IBC.”

Background of insolvency proceedings

The insolvency proceedings against the company had originally begun on December 20, 2024, following a petition filed by operational creditor Metro Tyres Limited under Section 9 of the IBC. Bhoopesh Gupta was initially appointed as Interim Resolution Professional and was later confirmed as the Resolution Professional by the CoC.

During the Corporate Insolvency Resolution Process (CIRP), the RP issued public announcements inviting claims from creditors and subsequently constituted the Committee of Creditors.

The reconstituted CoC included lenders such as Bank of Baroda, Kotak Mahindra Bank, IDFC First Bank, South Indian Bank, and others, with Bank of Baroda holding the largest voting share of 39.70%.

Multiple rounds of resolution attempts

The RP initiated the process of inviting Expressions of Interest (EOIs) from prospective resolution applicants. In the first round, nine EOIs were received, but only one resolution plan was eventually submitted. The CoC later annulled the process and issued a fresh invitation.

In the second round, three EOIs were received and two resolution plans were submitted and evaluated.

Despite multiple rounds of negotiations and voting in successive CoC meetings, neither resolution plan could secure the statutory 66% voting share required for approval. The highest-voted plan received only 47.66% support.

Deadlock in Committee of Creditors

The tribunal noted that the CoC had reached a complete deadlock, with nearly half of the members supporting the resolution plan while the remaining members favoured liquidation.

As the CIRP period, including all extensions, expired on February 13, 2026 without approval of any plan, the statutory condition for liquidation under Section 33(1)(a) of the IBC stood triggered.

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Liquidator appointed for process

The tribunal has appointed insolvency professional Lekhraj Bajaj as the liquidator to conduct the liquidation process in accordance with the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations.

The liquidator has been directed to take control of the company’s assets and submit a preliminary report within 75 days.

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