Sangeetha Prathap

The National Company Law Tribunal (NCLT), Hyderabad Bench has ordered the liquidation of Pavana Keerthi Hotels India Pvt. Ltd., after finding that the successful resolution applicant failed to perform the obligations under the approved resolution plan, including submission of the mandatory Performance Bank Guarantee (PBG). The tribunal held that with no further possibility of reviving the corporate debtor through the insolvency process, liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, 2016, was the only option left.

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A Bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri, in an order dated 20 November 2025, noted that all statutory preconditions for liquidation had been met and observed that “there is no impediment to granting the relief sought.” The tribunal recorded that “there is no further possibility of resolving the Corporate Debtor through the CIRP” and therefore liquidation must follow.

Insolvency proceedings were initiated against the corporate debtor in April 2022. Shortly thereafter, the National Company Law Appellate Tribunal granted a stay on the CIRP, which continued until May 2024. Upon dismissal of the appeal and lifting of the stay, the Resolution Professional resumed the process, issued a fresh Form G, and placed a resolution plan before the Committee of Creditors. The plan was submitted by resolution applicant Virigineni Anjaiah and was unanimously approved with 100% voting share by the sole financial creditor, Pridhvi Asset Reconstruction and Securitisation Company Ltd.

Following the approval of the plan, a Letter of Intent was issued in December 2024 requiring the successful resolution applicant to furnish a PBG of ₹4.80 crore, which represented 20% of the approved plan amount. Although the Committee of Creditors granted an extension for submission of the PBG and repeatedly issued reminders, the resolution applicant did not attend subsequent meetings and stopped responding altogether. The Letter of Intent was ultimately cancelled, and the earnest money deposit of ₹50 lakh was forfeited.

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The tribunal noted that the resolution applicant's conduct made it impossible to implement the approved plan. With the CIRP period having expired on 18 March 2025 and no viable resolution plan remaining on record due to non-compliance by the successful resolution applicant, the Committee of Creditors exercised its statutory powers and unanimously resolved in its 18th meeting to liquidate the corporate debtor and appoint the Resolution Professional as liquidator.

Taking note of these facts, the tribunal held that the requirements of Section 33(2) of the Code had been satisfied. It emphasised that once the resolution applicant defaults in complying with the terms of the plan, the CoC is justified in deciding to liquidate the corporate debtor. The tribunal therefore allowed the application seeking liquidation and appointed the Resolution Professional, Govada Venkata Subba Rao, as liquidator. Upon the passing of the liquidation order, the existing moratorium under Section 14 ceased, and all powers of the board of directors and key managerial personnel stood vested in the liquidator.

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Having found no further scope to revive the corporate debtor through the CIRP, the tribunal accordingly ordered liquidation of Pavana Keerthi Hotels India Pvt. Ltd. and directed the liquidator to proceed strictly under the Insolvency and Bankruptcy Code and the IBBI Liquidation Process Regulations.

Appearance

Mr. M Rama Rao, Learned Counsel for the Applicant.

Mr. GV Subba Rao, Resolution Professional.

Cause Title: Pridhvi Asset Reconstruction & Securitisation Company Ltd vs Sri Pavana Keerthi Hotels India Pvt Ltd

Case No: I.A (IBC) (Liq) No. 03/2025 in C.P. (IB) No. 153/7/HDB/2021

Coram: Shri. Rajeev Bhardwaj [Hon'ble Member (Judicial)], Shri. Sanjay Puri [Hon'ble Member (Technical)]