Hero Electric’s revival bid fails, liquidation ordered: Details

The National Company Law Tribunal (NCLT) has ordered the liquidation of Hero Electric Vehicles Pvt. Ltd. Ltd. after efforts to revive the company through the insolvency resolution process failed to produce an approved plan. This order was passed by the New Delhi Bench of NCLT on March 3, 2026.The tribunal said none of the resolution proposals received the necessary support from creditors within the timelines prescribed under the Insolvency and Bankruptcy Code (IBC). As a result, the provisions relating to liquidation under the Code were invoked.Insolvency proceedings against Hero Electric were initiated after Metro Tires Ltd filed a petition under IBC. Following the petition, the tribunal accepted the case and initiated the Corporate Insolvency Resolution Process (CIRP) on December 20, 2024. Once the process begins, the resolution professional invites claims from lenders and constitutes a Committee of Creditors (CoC) to monitor the resolution process. The committee included several financial institutions like Bank of Baroda, South Indian Bank, IDFC First Bank and Kotak Mahindra Bank.

During the insolvency process, the committee held several meetings to evaluate proposals from companies interested in taking over the business. Expressions of interest were invited from potential investors and several parties initially expressed interest in acquiring the company. Ultimately, two resolution plans were formally presented for consideration.However, when these proposals were put before the committee of creditors for voting, none of them managed to get the minimum approval required under the IBC framework. Under the law, a resolution plan must receive at least 66 per cent of the voting shares from creditors to be approved. The proposal that received the most support managed to garner 47.66 percent of the votes, which was below the required threshold.The tribunal found that creditors were divided over future action. While about half the creditors supported the resolution plan, the remaining members supported liquidation. Even after further discussion and reconsideration, the committee could not reach a consensus.Given the impasse and the expiry of the insolvency resolution timeline, the Tribunal concluded that continuation of the process would not serve any purpose under the IBC framework. Under Section 33(1)(a) of the Insolvency and Bankruptcy Code, if no resolution plan is approved before the end of the insolvency process period, liquidation can be ordered.