Late EoIs Cannot Be Entertained After CoC Opts for Liquidation, Rules NCLAT
- REEDLAW
- Aug 28
- 4 min read
REEDLAW Legal News Network reports: In a pivotal ruling, the National Company Law Appellate Tribunal dismissed an appeal challenging the rejection of a belated Expression of Interest in the CIRP of Nipman Fastener Industries Pvt. Ltd. The tribunal upheld that the Resolution Professional acted correctly in refusing the late submission, as the Committee of Creditors had exercised its commercial wisdom by deciding not to reopen the process and proceed towards liquidation under Regulation 32(e) or (f) of the Liquidation Process Regulations.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, while adjudicating a Company Appeal, held that allowing one delayed Expression of Interest would undermine the sanctity of the CIRP timeline and prejudice fairness, given that other potential resolution applicants had adhered to the prescribed deadlines. It further ruled that the CoC’s decision to reject belated EoIs and opt for liquidation fell squarely within its commercial wisdom, which is non-justiciable under the IBC. The tribunal also clarified that the Athena India Opportunities ruling cited by the appellant was fact-specific and did not mandate acceptance of late submissions.
The National Company Law Appellate Tribunal (NCLAT) heard an appeal challenging the order dated 06.02.2025 passed by the Adjudicating Authority (NCLT, New Delhi Court-III) in IA No.4529 of 2023. The appellant had sought permission to file its Expression of Interest (EoI) in the Corporate Insolvency Resolution Process (CIRP) of Nipman Fastener Industries Pvt. Ltd. and requested directions to the Resolution Professional (RP) to consider the EoI and share the relevant documents. The last date for submission of EoI was 24.07.2023; however, the appellant submitted its EoI on 26.07.2023 under the mistaken belief that the deadline was 26.07.2023. The RP rejected the EoI, citing the delay, and the appellant moved the NCLT for relief.
The Adjudicating Authority rejected the appellant’s application, observing that the Committee of Creditors (CoC), in its 16th meeting held on 01.04.2024, had already decided not to accept any belated EoIs and resolved to proceed with the liquidation of the Corporate Debtor. The CoC emphasised that allowing one delayed EoI would be unfair without reopening the process for the public at large. The RP, therefore, acted in accordance with the CoC’s decision and applicable regulations by rejecting the appellant’s request. The Adjudicating Authority also noted that the CoC reaffirmed its stance in subsequent meetings and had resolved to file a liquidation application for the sale of the Corporate Debtor or its business as a going concern under Regulation 32(e) or (f) of the Liquidation Process Regulations.
On appeal, the appellant argued that the objective of the Insolvency and Bankruptcy Code (IBC) is to ensure the revival of the Corporate Debtor, and that, being engaged in the same line of business, it was fully capable of such revival. It was further contended that at the time of deciding liquidation, no resolution plan was under consideration, and therefore, its EoI should have been entertained. The respondent, however, maintained that after the expiry of the deadline for EoI submissions, the RP was not empowered to accept any delayed submissions, relying on Regulation 36A of the CIRP Regulations.
The NCLAT upheld the NCLT’s order, observing that the CoC had exercised its commercial wisdom in deciding not to accept any belated EoIs and to move towards liquidation. The tribunal clarified that the reliance placed by the appellant on the Athena India Opportunities case was misplaced, as that decision was based on its own facts and did not establish any principle requiring the acceptance of late EoIs. Accordingly, the appellate tribunal concluded that no error had been committed by the Adjudicating Authority in rejecting the appellant’s application. The appeal was dismissed.
Mr. Rishi Kapoor, Mr. Shashank Agarwal, Mr. Abhishek Taneja and Mr. Surya Singh Sirohi, Advocates, represented the Appellant.
Ms. Honey Satpal and Mr. Kanishk Khullar, Advocates, appeared for the Respondent.
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