Adjudicating Authority approves liquidation of a company under Insolvency and Bankruptcy Code

The Adjudicating Authority admitted the petition for Corporate Insolvency Resolution Process (CIRP) under section 9 of the Insolvency and Bankruptcy Code, 2016, appointing an Interim Resolution Professional (IRP) initially. Subsequently, the Resolution Professional (RP) replaced the IRP. With no resolution plans received during the process, the RP applied for liquidation under sections 33(1) and 33(2) of the Code. The Committee of Creditors (CoC) approved liquidation proceedings, appointing the RP as the Liquidator. The Liquidator was directed to attempt to sell the company as a going concern and follow asset sale regulations if unsuccessful, with requisite public announcements and notifications.

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Issues involved:
1. Admission of Corporate Insolvency Resolution Process (CIRP) under section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Application for liquidation of the Corporate Debtor Company under section 33(1) and 33(2) of the Insolvency and Bankruptcy Code, 2016.
3. Approval for liquidation proceedings by Committee of Creditors (CoC) and appointment of Liquidator.
4. Orders regarding the liquidation process and disposal of assets.

Issue 1: Admission of Corporate Insolvency Resolution Process (CIRP)

The case involved the filing of CP(IB) No. 248/2018 seeking reliefs under section 9 of the Insolvency and Bankruptcy Code, 2016 for a company, treating it as a Corporate Debtor. The Adjudicating Authority admitted the petition and appointed an Interim Resolution Professional (IRP). However, the CoC replaced the IRP with a Resolution Professional (RP) in a subsequent meeting.

Issue 2: Application for liquidation

The RP filed an application for the liquidation of the Corporate Debtor Company under section 33(1) and 33(2) of the Insolvency and Bankruptcy Code, 2016, stating that the Corporate Insolvency Resolution Process had expired. Despite multiple invitations for Expression of Interest (EoI), no resolution plans were received, leading to the failure of the resolution process.

Issue 3: Approval for liquidation proceedings and appointment of Liquidator

Upon the expiry of the Corporate Insolvency Resolution Process, the CoC approved the initiation of liquidation proceedings and proposed the RP as the Liquidator. The RP consented to act as the Liquidator, and the Adjudicating Authority passed an order of liquidation for the Corporate Debtor Company, appointing the RP as the Liquidator under Section 34(1) of the IB Code.

Issue 4: Orders regarding the liquidation process and disposal of assets

In line with the Supreme Court's directive in a specific case, the Adjudicating Authority ordered the Liquidator to attempt to dispose of the Corporate Debtor Company as a going concern. If unsuccessful within a specified period, the Liquidator was directed to follow the provisions for the sale of assets as per regulations. Public announcements and notifications to the Registrar of Companies were also ordered as part of the liquidation process.

This comprehensive summary covers the key issues addressed in the judgment, detailing the legal proceedings and decisions made by the Adjudicating Authority in the matter.

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