The National Company Law Tribunal (NCLT), New Delhi Bench, ordered the immediate liquidation of Hero Electric Vehicles Pvt Ltd, highlighting the mounting challenges in India’s electric two-wheeler sector.
The order, issued on 3 March 2026, follows the expiry of the Corporate Insolvency Resolution Process (CIRP) on 13 February 2026 after no resolution plan secured the required 66 per cent approval from the Committee of Creditors (CoC).
The proceedings began on 20 December 2024, when the operational creditor, Metro Tyres Ltd, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC). Subsequently, the National Company Law Tribunal (NCLT) admitted Hero Electric Vehicles Pvt Ltd into the Corporate Insolvency Resolution Process (CIRP). Bhoopesh Gupta was appointed as the Resolution Professional (RP), who subsequently issued public announcements in Financial Express and Jansatta, collated creditor claims, and constituted the Committee of Creditors (CoC).
The reconstituted Committee of Creditors (CoC) included key lenders, including Bank of Baroda, which held a secured claim of ₹55.35 crore with a 39.70 per cent voting share, South Indian Bank with ₹17.62 crore (12.64 per cent), and IDFC First Bank with a 6.76 per cent share. Among unsecured creditors, SLK Software accounted for a substantial 34.34 per cent voting share.
Over 16 CoC meetings, the RP conducted two rounds of Expressions of Interest (Form G), shortlisted prospective resolution applicants, and received multiple resolution plans. However, despite extensive deliberations and negotiations, none of the proposals secured the required approval from the creditors.
Failed resolutions and extensions
Initial plans surfaced in May 2025, but the CoC annulled the process, sought 90-day extensions (granted 12 June 2025), and reissued Form G. A second round yielded two viable plans by August 2025, sparking further 60-day extensions (24 September and 20 November 2025).
Even re-voting the top plan under Regulation 39B and a final 30-day push (21 January 2026) couldn’t muster 66 per cent—the best hit just 47.66 per cent, splitting the CoC roughly 50-50 between revival and wind-down.
Complicating matters, a transaction audit by JTST Co. LLP uncovered potential fraudulent transactions under Section 66 of the IBC, with IA-3950/2025 still pending.
With the CIRP clock expired, RP Gupta invoked Section 33(1)(a), arguing further delays would erode asset value—a position NCLT upheld, noting no CoC pre-approval for liquidation is needed post-deadline.
Liquidation mechanics and new oversight
NCLT appointed Lekhraj Bajaj (IBBI/IPA-002/IP-N00039/2016-2017/10078, based in Pitampura, Delhi) as Liquidator, relieving Gupta and transferring all records. Board powers cease under Section 34(2), with personnel mandated to cooperate per Section 19. Pending claim IAs (e.g., IA-2185/2025) are infructuous but refilable under Liquidation Regulations 16-20.
A fresh Section 33(5) moratorium kicks in, barring suits against the estate. Bajaj must issue a 75-day preliminary report, probe affairs under Section 35(1), pursue avoidance transactions, and notify authorities such as the Income Tax and GST. Fees follow IBBI scales, prioritising the liquidation estate per Section 53 waterfall.
Secured creditors like Bank of Baroda stare down massive haircuts, while suppliers and employees brace for uncertainty. This joins a string of EV insolvencies, spotlighting over-leverage, subsidy delays, and battery supply woes in a market pivotal to India’s 2030 electrification goals.
The verdict underscores IBC’s time-bound rigour but questions CoC dynamics in distressed sectors. Stakeholders watch to see whether liquidation yields fair value or merely accelerates industry consolidation.
