NCLT Bengaluru: SCC Role is Consultative, Directs Liquidator to Accept ₹2 Crore OTS in Bhuvana Infra Liquidation

March 18, 2026 : The National Company Law Tribunal (NCLT), Bengaluru Bench, has reaffirmed that the Stakeholders’ Consultation Committee (SCC) in liquidation proceedings performs only a consultative function, with ultimate decision-making authority resting with the liquidator.

In an order dated March 18, 2026, the Tribunal directed the liquidator of Bhuvana Infra Projects Private Limited to accept a one-time settlement (OTS) offer of ₹2 crore submitted by Orchid Elite Developers Private Limited (OEDPL) to resolve a prolonged deadlock in the liquidation process.

The application was filed by Vijay Pitamber Lulla, the liquidator, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking directions on whether to accept the OTS proposal or assign the outstanding receivable as a Not Readily Realisable Asset (NRRA) to Markrise Consultants Private Limited.

The corporate debtor had entered the Corporate Insolvency Resolution Process (CIRP) on January 17, 2018, and was subsequently ordered into liquidation on December 10, 2019. During liquidation, while movable assets were sold and substantial recoveries made, an amount of ₹10.80 crore remained outstanding from OEDPL (formerly Prisha Properties India Pvt. Ltd.).

To resolve this, the liquidator placed two proposals before the SCC:

• An OTS offer of ₹2 crore from OEDPL payable within 90 days; and
• An assignment proposal from Markrise Consultants with a recovery-sharing mechanism.

However, despite multiple meetings and e-voting rounds, the SCC failed to take a decision. In one such voting process, stakeholders holding 97.43% voting share abstained, resulting in a complete stalemate. The Tribunal noted that repeated non-participation and indecision by stakeholders significantly delayed the liquidation process and increased costs.

Examining Regulation 31A(10) of the IBBI (Liquidation Process) Regulations, 2016, the Bench emphasised that the advice of the SCC is not binding on the liquidator. It further relied on the Supreme Court’s ruling in R.K. Industries (Unit-II) LLP v. H.R. Commercials Private Limited, which clarifies that the liquidator retains authority over asset realisation decisions despite stakeholder consultation.

Taking note of the prolonged delay and the need for value maximisation, the Tribunal exercised its powers under Section 60(5) of the IBC and issued the following directions:

• The liquidator shall accept the OTS proposal dated February 23, 2024, for ₹2 crore as full and final settlement of the ₹10.80 crore receivable.
• The amount must be realised within 90 days from acceptance.
• If OEDPL fails to honour the settlement, the liquidator may proceed to assign the receivable as NRRA to Markrise Consultants.
• The realised amount shall be distributed in accordance with Section 53 of the IBC.

The Tribunal observed that the SCC’s passive conduct had created a deadlock, and judicial intervention was necessary to ensure timely completion of liquidation and prevent further erosion of value.

The application was accordingly allowed and disposed of.

Cause Title: Vijay Pitamber Lulla, Liquidator of Bhuvana Infra Projects Private Limited v. K. Usha Rani & Ors.
Case No.: I.A. No. 1090/2025 in C.P. (IB) No. 122/BB/2017
Coram: Sunil Kumar Aggarwal (Judicial Member) and Radhakrishna Sreepada (Technical Member)