Liquidation under Insolvency Code follows when the resolution plan lacks unconditional creditor approval and CIRP has expired.

Where a resolution plan did not receive the requisite unconditional approval of the Committee of Creditors and the CIRP period had expired, the statutory basis for approval under the Insolvency and Bankruptcy Code was not met. The NCLT, Mumbai Bench therefore proceeded to liquidation under Section 33(1), directed liquidation of the corporate debtor, and appointed the resolution professional as liquidator. The operative principle stated is that failure to secure the necessary creditor approval, coupled with exhaustion of the resolution timeline, triggers liquidation under the Code.

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Issues: Whether the corporate debtor was liable to be liquidated under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 in the absence of unconditional approval of the resolution plan by the financial creditors and after expiry of the CIRP period.

Analysis: The record showed that the resolution plan had not received unconditional approval from the financial creditors forming the Committee of Creditors. The plan was not finally affirmed by the major voting creditors, and the resolution professional later informed the Bench that the plan stood rejected by the major financial creditor. In these circumstances, and since the CIRP timeline had already expired, the statutory precondition for approval of the resolution plan was not satisfied. The Bench therefore proceeded to the liquidation stage contemplated by the Code.

Conclusion: The corporate debtor was directed to be liquidated, and the resolution professional was appointed to act as liquidator.

Final Conclusion: The application resulted in commencement of liquidation proceedings against the corporate debtor, with all consequential powers and restrictions under the insolvency regime following from that order.

Ratio Decidendi: Where a resolution plan does not obtain the requisite unconditional approval of the Committee of Creditors and the resolution process has run its course, liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 follows.

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