Liquidator Retains CoC Voting Rights Until Share Reissue | NCLT

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Liquidator CoC Voting Rights

Case Details: Gouri Iron & Steel (P.) Ltd. vs. Chaitanya Alloys (P.) Ltd. [2026] 186 taxmann.com 697 (NCLT - Kolkata)

Judiciary and Counsel Details

  • Smt Bidisha Banerjee, Judicial Member & CMDE Siddharth Mishra, Technical Member
  • Rahul Parasrampuria, Dheeraj Garg & Avik Chaudhuri, Advs. for the Appellant. 
  • Udit Agarwal, Rakesh Dugar & Ms Shruti Majumdar, Advs. for the Respondent.

Facts of the Case

In the instant case, Gouri Iron & Steel Private Limited, while under liquidation, held 96.97% of the voting share in the CoC of Chaitanya Alloys Private Limited.

The Gouri Iron & Steel Private Limited was sold as a going concern, and a Sale Certificate was issued in favour of the successful bidder. However, existing shares of Gouri Iron & Steel Private Limited had not been extinguished and reissued.

The Resolution Professional (RP) of Chaitanya Alloys Private Limited sought directions on the completion of the going concern sale and on the entitlement to represent Gouri Iron & Steel Private Limited in the CoC.

It was noted that in a sale as a going concern, the mere issuance of a Sale Certificate does not, by itself, confer ownership upon the successful bidder, and the sale cannot attain finality until existing shares are extinguished and fresh shares are reissued. Further, it was noted that since the shares had not been reissued, the sale was incomplete.

The NCLT observed that the successful bidder had not acquired complete ownership and control over the company and therefore lacked authority to represent the financial interests of Gouri Iron & Steel Private Limited in the CoC meetings of Chaitanya Alloys Private Limited.

Further, the NCLT observed that until the extinguishment and reissuance of shares, management continued to vest in the Liquidator, who was duty-bound to participate in and vote on behalf of Gouri Iron & Steel Private Limited at the CoC meetings.

NCLT Held

The NCLT held that the successful bidder could not participate, attend or vote in the CoC meetings of Chaitanya Alloys Private Limited, and the Liquidator would continue to represent Gouri Iron & Steel Private Limited therein.

List of Cases Referred to

  • Dharmendra Kumar Bhasin (Liquidator) v. Bombay Stock Exchange (2026) ibclaw.in 193 NCLT (para 7.5)

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied