Insolvency Tribunal Affirms Liquidation of Sintex Plastics Technology

The National Company Law Appellate Tribunal (NCLAT) upheld a previous order directing the liquidation of Sintex Plastics Technology. RBL Bank, as the sole Committee of Creditors (CoC) member, abstained from voting on a resolution plan. The NCLAT ruled that commercial wisdom of the CoC is paramount, dismissing the appeal.

The National Company Law Appellate Tribunal (NCLAT) has affirmed a decision made by the National Company Law Tribunal (NCLT) for the liquidation of Sintex Plastics Technology, a company burdened with debt.

Despite the lone Committee of Creditors (CoC) member, RBL Bank, abstaining from voting, the tribunal acknowledged that this action indicated the bank's commercial wisdom. Subhlaxmi Investment Advisory, an unsuccessful bidder, argued that the resolution plan was not formally rejected, but NCLAT overruled this contention, citing previous Supreme Court precedents.

The failure of the CoC to vote effectively paved the way for the company's liquidation, as mandated by the Court. Sintex Plastics faced this outcome after its Corporate Insolvency Resolution Process (CIRP) expired, leading to the initiation of liquidation proceedings in April 2024.

(With inputs from agencies.)