Only CoC has Authority to Choose Liquidator Under IBC | NCLAT

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CoC authority to appoint liquidator

Case Details: Omkara Asset Reconstruction (P.) Ltd. vs. Amit Vijay Karia - [2025] 181 taxmann.com 173 (NCLAT-New Delhi)[01-12-2025]

Judiciary and Counsel Details

  • N. Seshasayee, Judicial Member & Arun Baroka, Technical Member
  • Abhijeet Sinha, Sr. Adv., Ms Kiran Sharma, Ms Niharika Sharma, Somdutta Bhattacharya, Saikat Sarkar & Ms Heena Kochar, Advs. for the Appellant.
  • Alam Khan for the Respondent.

Facts of the Case

In the instant case, the Adjudicating Authority passed an order for liquidation of the corporate debtor and appointed second respondent as liquidator, who was neither Resolution Professional (RP) appointed during the CIRP, nor was candidate of CoC’s choice.

The appellant, who had about 98% voting share in the CoC, preferred an instant appeal asserting that right to appoint liquidator rests with the CoC.

NCLAT Held

The NCLAT held that only the CoC has the authority to select candidate for replacing RP for purposes of section 34(4)(c) of the IBC, even though authority to formally appoint such RP as selected by procedure contemplated in section 27 rests with the Adjudicating Authority.

The NCLAT held that once the CoC names a liquidator and IBBI confirms it, the Adjudicating Authority is required to appoint liquidator named by the CoC. Therefore, order of the Adjudicating Authority appointing liquidator was to be set aside and once the IBBI confirms liquidator named by the CoC, the Adjudicating Authority is required to appoint it as liquidator.

List of Cases Reviewed

  • Order of National Company Law Tribunal, Indore Bench I.A.(LIQ) No.1/MP/2025 in C.P. (IB) No.53/MP/2023 and I.A.(LIQ) No.3/MP/2024 in C.P. (IB) No.54/MP/2023, dated 11-06-2025 (para 15) reversed

List of Cases Referred to

  • Manish Jaju v. Committee of Creditors [C.A.(AT)(Ins.) 1165 of 2025, dated 1-8-2025] (para 3)
  • Moore v. Dempsey 261 US 86 (1923) (para 13)
  • Y. Balaji v. Karthik Desari [2023] 150 taxmann.com 329/179 SCL 49 (SC) (para 13).

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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