NCLAT upholds liquidation of Worlds Window Exim after rejecting Rs 7 crore plan

The National Company Law Appellate Tribunal (NCLAT) on 12 October 2026 upheld an order sending Worlds Window Exim Private Limited into liquidation, after rejecting a Rs 7 crore resolution plan that was below the company's liquidation value of about Rs 9.42 crore. The tribunal dismissed two appeals, one by the successful bidder and one by Prudent ARC Limited, which held 94.86% of the creditors' votes. It also upheld a direction for an investigation into the company's affairs.

What Happened

According to the judgment, Central Bank of India filed for insolvency against the company, an asset-holding firm with no operations that held land parcels in Ghaziabad district, Uttar Pradesh. The case was admitted on 16 May 2025. During the process, the debts of Bank of India, Bank of Baroda and Central Bank of India were assigned to Prudent ARC, an asset reconstruction company, giving it 94.86% of the vote in the committee of creditors. Punjab National Bank held the remaining 5.14%.

The committee approved a plan from Dickey Special Situation Investment Trust-DSSF Series 2 offering Rs 7 crore. On 14 August 2026, the New Delhi bench of the National Company Law Tribunal (NCLT) rejected it and ordered liquidation, which means the company's assets are sold to repay creditors.

The NCLAT held that a plan paying less than liquidation value is not illegal by itself. But it held that this plan did not show how it addressed the cause of the default, a mandatory requirement, and so failed the Code. The NCLAT said the overall circumstances, including the assignment of public-sector bank debt during the process, supported the NCLT's doubt about the plan. It upheld the liquidator's investigation under Sections 43, 45, 50 and 66 of the Insolvency and Bankruptcy Code, noting that the persons concerned will be heard before any order against them.

What It Means

The NCLAT set aside one NCLT direction that had capped the asset reconstruction company's share at what it paid Central Bank of India. It called that direction premature until the investigation ends, and kept all contentions open.

The ruling indicates that a resolution plan backed by most creditors can still be rejected if it fails the mandatory content rules. The NCLAT's order may be appealed to the Supreme Court.

Source: NCLAT order