NCLT Orders Liquidation Of First Flight Couriers After Resolution Plan Fails Over EPFO Dues

Mumbai: The National Company Law Tribunal (NCLT) has ordered the liquidation of First Flight Couriers Limited after the Committee of Creditors (CoC) failed to approve a resolution plan with respect to payment of Employees’ Provident Fund Organisation (EPFO) dues.

The petition was filed against the courier company by Srinidhi Comprint Private Limited under Section 9 of the IBC, whereby later Corporate Insolvency Resolution Process (CIRP) was initiated on October 3, 2022.

During the CIRP, a resolution plan submitted by Autope Payments Pvt. Ltd. was approved by the CoC with 78.41 per cent voting share after the 14th CoC meeting held in December 2023. However, when the plan was placed before the NCLT for approval, the tribunal, by an order dated June 26, 2024, sent it back to the CoC for reconsideration after finding that it failed to provide for full payment of EPFO dues, which are protected under the IBC.

Subsequently, the CoC held multiple meetings to consider modifications to the plan and reallocation of funds. Although a proposal to pay Rs 3.5 crore towards EPFO dues was discussed, it failed to secure the required voting share. The creditors were also unable to reach a consensus on full payment of the provident fund claims or on initiating liquidation proceedings during several meetings held in 2024.

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The Resolution Professional thereafter approached the tribunal seeking appropriate directions, contending that the CoC had neither approved a compliant resolution plan nor agreed to liquidation despite expiry of the CIRP period.

Observing that the CIRP period had expired and that the CoC had failed to approve a resolution plan meeting statutory requirements despite being granted sufficient opportunity, the NCLT held that continuation of the insolvency resolution process would serve no useful purpose. The tribunal noted that the CoC, exercising its commercial wisdom, had resolved to liquidate the corporate debtor as no viable resolution proposal was available.

Accordingly, the NCLT passed an order for liquidation of First Flight Couriers Limited.

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