Kamal Ghorui
The National Company Law Tribunal (NCLT) has ordered the liquidation of Hero Electric Vehicles Pvt. Ltd. after efforts to revive the company through the insolvency resolution process failed to produce an approved plan. The order was passed by the NCLT’s New Delhi Bench on March 3, 2026.The tribunal noted that no resolution proposal received the required support from creditors within the timeline set under the Insolvency and Bankruptcy Code (IBC). As a result, the provisions related to liquidation under the code were triggered.The insolvency proceedings against Hero Electric began after Metro Tyres Limited filed a petition under the IBC. Following the petition, the tribunal admitted the case and initiated the Corporate Insolvency Resolution Process (CIRP) on December 20, 2024. After the process began, the resolution professional invited claims from creditors and formed a Committee of Creditors (CoC) to oversee the resolution process. The committee included several financial institutions such as Bank of Baroda, South Indian Bank, IDFC First Bank and Kotak Mahindra Bank, among others.
During the insolvency process, the committee held multiple meetings to evaluate proposals from companies interested in taking over the business. Expressions of interest were invited from potential investors and several parties initially showed interest in acquiring the company. Eventually, two resolution plans were formally submitted for consideration.However, when these proposals were put to vote before the Committee of Creditors, neither of them managed to secure the minimum approval required under the IBC framework. Under the law, a resolution plan must receive at least 66 percent voting share from creditors to be approved. The proposal that received the highest support managed to secure 47.66 percent of the votes, which fell short of the required threshold.The tribunal observed that creditors remained divided over the future course of action. While nearly half of the creditors supported a resolution plan, the remaining members favoured liquidation. Even after further discussions and reconsideration, the committee could not reach a consensus.Given the deadlock and the expiry of the insolvency resolution timeline, the tribunal concluded that continuing the process would not serve any purpose under the IBC framework. Under Section 33(1)(a) of the Insolvency and Bankruptcy Code, liquidation can be ordered if no resolution plan is approved before the insolvency process period ends.
