Liquidation follows when the insolvency resolution period ends without any plan or extension recommendation.

On expiry of the corporate insolvency resolution period without any resolution plan and without a recommendation for extension, the insolvency process moves to liquidation under the Insolvency and Bankruptcy Code, 2016 and the Liquidation Process Regulations. The text notes that, where no plan had been received and the committee of creditors had barely commenced its work, liquidation was the statutory consequence. It further states that the adjudicating authority may refuse to appoint the existing resolution professional as liquidator if the circumstances justify that course, and may seek a fresh name from the Insolvency and Bankruptcy Board of India.

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Issues: Whether, on expiry of the corporate insolvency resolution period without submission of any resolution plan and without any recommendation for extension, the corporate debtor was required to be taken into liquidation and a liquidator appointed.

Analysis: The application had already been admitted and the corporate insolvency resolution process was nearing the statutory limit of 180 days. No resolution plan had been received, and only one meeting of the committee of creditors had been held. In these circumstances, and in the absence of any recommendation for extension, the statutory scheme under the Insolvency and Bankruptcy Code, 2016 required the process to move to liquidation under Chapter III of the Code and the Liquidation Process Regulations. The order also recorded that the existing resolution professional had not taken adequate steps for inviting resolution plans and, for that reason, the Court declined to appoint him as liquidator and instead sought a name from the Insolvency and Bankruptcy Board of India.

Conclusion: The corporate debtor was directed to undergo liquidation, and the appointment of the liquidator was to be made through a fresh name recommended by the Insolvency and Bankruptcy Board of India.

Ratio Decidendi: Where the statutory period for corporate insolvency resolution expires without any resolution plan and without a valid recommendation for extension, liquidation follows in accordance with the Insolvency and Bankruptcy Code, 2016, and the adjudicating authority may decline to appoint the existing resolution professional as liquidator if the circumstances so warrant.

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