Moushumi Bhattacharya, J.

1. The present Writ Petition has been filed against an order of the National Company Law Tribunal, Hyderabad Bench – II (‘NCLT’) dated 15.07.2026 rejecting an application filed by the respondent No.2 - M/s. Maximus ARC Limited - for grant of 90 days time to consider a proposal for Compromise and Arrangement.

2. The I.A. was filed under The Insolvency and Bankruptcy Code, 2016 (‘IBC’) in respect of the respondent No.1 Corporate Debtor/M/s. Sri Lakshmikantha Spinners Limited (In Liquidation).

3. The respondent No.1 is represented in the present Writ Petition by the Liquidator. The respondent No.2 - M/s. Maximus ARC Limited is the Sole Financial Creditor holding 100% of the voting share of the respondent No.1 in Liquidation. Maximus ARC sought 90 days time to consider the Scheme under section 230 of The Companies Act, 2013 (‘the 2013 Act’) for Rs.47.06 crores, including Rs.44 crores to the Secured Creditor.

4. By the impugned order, the NCLT rejected the Creditor’s application on the ground that the Scheme had earlier been rejected by an order passed by the NCLT on 16.06.2026 and that there was no intervening change in circumstances to merit a different order. According to the NCLT, the only change was assignment of the debt by the State Bank of India in favour of Maximus ARC. The NCLT, vide the same order, disposed of another I.A. filed by the Liquidator granting extension of time to complete the Liquidation process on or before 31.10.2026.

5. We have heard learned Senior Counsel appearing for the writ petitioner, the learned Standing Counsel appearing for the respondent No.1/Liquidator, learned counsel appearing for the respondent No.2/Financial Creditor and the respondent No.3/Secretary, Ministry of Finance.

6. The primary contention of Senior Counsel appearing for the writ petitioner is that the NCLT failed to take into consideration that there was a significant change of circumstances after the order dated 16.06.2026, in terms of the State Bank of India’s assignment of the debt in favour of the respondent No.2 - Maximus ARC. The assignment was concluded on 30.06.2026 with the assignee (respondent No.2) as the Sole Creditor holding 100% of the voting share. Senior Counsel submits that there is no ‘collateral challenge’ to the order dated 16.06.2026 or ‘res judicata’ in such circumstances, as an extension under Regulation 2B of The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (‘IBBI Regulations, 2016’) is procedural and not an adjudication on the merits of the Scheme.

7. It is also submitted that revival under section 230 of The Companies Act, 2013 should be given primacy over and above Liquidation. It is further submitted that the Scheme provides a substantially higher value than the Liquidation Value of the Corporate Debtor, i.e., Rs.47.06 crores and thereby advances the objective of value maximization under the IBC.

8. Counsel appearing for the respondent No.2 - M/s. Maximus ARC Limited and the respondent No.3 - Secretary, Ministry of Finance, do not oppose the submissions made on behalf of the writ petitioner. In fact, the case sought to be made out by the Financial Creditor/Maximus ARC is virtually identical to that of the writ petitioner, namely, that revival of the Company in Liquidation/respondent No.1 Corporate Debtor is the object of the IBC, in terms of value maximization and is better than any proposed auction of the property of the Corporate Debtor.

9. Senior Counsel and counsel appearing for the parties, rely on a Common Order passed by this Court on 28.11.2025 in two Writ Petitions (Nos.35044 and 35052 of 2025), by which a Common Order passed by the National Company Law Tribunal on 11.11.2025, dismissing the applications filed by the writ petitioner for extension of time for considering the Scheme under section 230 of the 2013 Act read with the IBBI Regulations, 2016, was set aside.

10. We have considered the submissions made on behalf of the parties.

11. Section 230, falling under Chapter XV of The Companies Act, 2013 deals with the ‘Power to compromise or make arrangements with creditors and members’. It authorises the Tribunal to order a meeting of the Creditors or members or of members of the Company, on an application of the Company or any Creditor or Member, to take forward a proposal for Compromise/Arrangement between a Company and its Creditors/members.

12. Regulation 2B(1) of the IBBI Regulations, 2016 stipulates that a Compromise or Arrangement proposed under section 230 of the 2013 Act shall be completed within ninety days of the order of Liquidation. Regulation 2B(2) provides that the time taken on Compromise or Arrangement, not exceeding ninety days, shall not be included in the Liquidation Period.

13. The window of ninety days under Regulation 2B(1) has been relaxed in fit cases, including by the National Company Law Appellate Tribunal at Chennai in M/s. Prakash Oil Depot v. G. Madhusudhan Rao (Company Appeal (AT) (CH) (Ins) No.3O4 & 306 of 2025, dated 01.08.2025). The Supreme Court has also held that revival of the Company is of paramount importance even in Liquidation since Liquidation is the last resort: Arun Kumar Jagatramka v. Jindal Steel & Power Ltd ((2021) 7 SCC 474).

14. Therefore, Regulation 2B(1) cannot be construed as inflexible in all circumstances this means that due weightage must be given to the facts in each case. The undisputed facts in the present case are as follows.

15. Assignment of the debt by the State Bank of India in favour of the respondent No.2 - Maximus ARC was concluded on 30.06.2026. Pursuant to which the assignee, Maximus ARC, became the 100% Creditor of the respondent No.1, M/s. Sri Lakshmikantha Spinners Limited (In Liquidation). Moreover, the assignee, Maximus ARC, resolved to pursue the Scheme for value maximization in the meetings of the Committee of Creditors held on 01.07.2026 and 10.07.2026. It is admitted that SBI was simultaneously pursuing two remedies: namely sale of its debt to Maximus ARC and settlement of the account with the Company/respondent No.1, as a going concern under the Scheme. It is hence obvious that the State Bank of India gave priority to the sale of the debt, which explains the reason as to the Board of SBI not taking a decision on the Scheme. The decision-making body of SBI, in any event, changed pursuant to the assignment of the debt in favour of Maximus ARC. The Scheme, which earlier awaited the sanction of the Internal Board of SBI will now be considered by the Board of Maximus ARC, whose very business is the resolution of stressed assets.

16. The above facts would show that the NCLT erred in assuming that there was no change in circumstances after the earlier rejection of the Scheme on 16.06.2026 and that its subsequent assignment of debt does not create any separate or independent right. Contrary to this finding, the assignor entity changed subsequent to 16.06.2026 from State Bank of India to Maximus ARC, which are altogether two different Creditors with two different Boards including different Commercial mandates. In essence, the assignment of the debt in favour of the respondent No.2/Maximus ARC cannot be treated as an inconsequential change or one which would merit a repeat rejection of the Scheme, similar to that of the order of 16.06.2026.

17. The consequent finding of the NCLT with regard to the application for extension amounting to a ‘collateral challenge’ to the earlier order of 16.06.2026 lacks basis. An order of extension under Regulation 2B(1) is procedural as opposed to an adjudication on the merits of the Scheme. The application made by Maximus ARC for extension of time for considering the Compromise or Arrangement proposal submitted by the writ petitioner was founded on events subsequent to 16.06.2026. Incidentally, the respondent No.2/Maximus ARC was not even the Creditor as on 16.06.2026.

18. The Scheme should also have weighed positively with the NCLT. The Scheme, vetted by an Advocate at the instance of the Liquidator, proposed an amount of Rs.47.60 crores which substantially exceeds the Liquidation value of the Corporate Debtor/respondent No.1. Hence, the Scheme serves the very object of the IBC, namely, value maximization, better than an auction of the assets of the Corporate Debtor. The balance of convenience in the instant case is also significant. No auction Notice has been issued till date and the NCLT has extended the Liquidation window till 31.10.2026. This additionally shows that an extension of time of ninety days to consider the Scheme would not prejudice anyone. The rejection, on the other hand, would only foreclose a Scheme fully supported by the entire body of Financial Creditors and force a piecemeal auction of uncertain realization.

19. In this context, it is further relevant that the writ petitioner’s Rs.1.25 crores has been with the State Bank of India since 19.09.2023. Lastly, the Commercial wisdom of the Committee of Creditors is paramount: Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors ((2020) 8 SCC 531). The NCLT cannot substitute its wisdom for the commercial wisdom of the Committee of Creditors. The Financial Stakeholder itself made an application before the NCLT since it is only the Stakeholder whose money is at stake.

20. Since the parties have relied on the order passed by this Court on 28.11.2025 in W.P.Nos.35044 and 35022 of 2025, it is also relevant that, as opposed to the earlier set of facts in those two Writ Petitions, there are no conditions imposed by the Stakeholders Consultation Committee in the present case. To conclude, once the ninety-day period under Regulation 2B(1) has been construed as flexible by the NCLT in Prakash Oil Depot (supra), on the ground that extension would be commercially beneficial to the Company and protects against value-destruction, there was no reason for the NCLT to reject the extension application filed by the Financial Creditor. As stated above, the reasons given by the NCLT are untenable and without any legal or factual basis.

21. The above reasons persuade us to set aside the impugned order passed by the NCLT dated 15.07.2026.

22. W.P.No.25260 of 2026, along with all connected applications, is accordingly allowed and disposed of.