Corporate debtor liquidation ordered under Section 33(1) after no resolution plan submitted under Section 30(6)

The NCLT Hyderabad ordered liquidation of the CD under Section 33(1) read with Section 34(1) of the IBC, 2016. The RP sought liquidation after no resolution plan was submitted to the adjudicating authority. The court held that when no resolution plan is received under Section 30(6), the adjudicating authority has power to order liquidation under Section 33(1)(a) without requiring a specific CoC resolution for liquidation. The absence of pending resolution plans before the CoC and the adjudicating authority justified the liquidation order, making questions of CoC coordination immaterial.

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Issues Involved:
1. Liquidation of the Corporate Debtor (CD) under sections 33(1) and 34(1) of the Insolvency & Bankruptcy Code, 2016.
2. Coordination and resolution between the Committee of Creditors (CoC) and the Resolution Professional (RP).
3. Compliance with procedural requirements under the Insolvency & Bankruptcy Code, 2016.

Summary of Judgment:

Issue 1: Liquidation of the Corporate Debtor (CD)
The application sought an order for the liquidation of the Corporate Debtor (CD) under sections 33(1) and 34(1) of the Insolvency & Bankruptcy Code, 2016. The Tribunal noted that the CD was taken to Corporate Insolvency Resolution Process (CIRP) by an order dated 05/09/2019. Despite multiple extensions and efforts to invite resolution plans, no viable resolution plan was received. The Tribunal emphasized that the CIRP period had already expired, and no resolution plans were pending before the CoC. Consequently, the Tribunal ordered the liquidation of the CD as per Chapter III of Part II of the I&B Code, 2016.

Issue 2: Coordination and Resolution between CoC and RP
The counsel for the suspended director of the CD raised objections regarding the lack of coordination between the CoC and the RP and argued that no resolution for liquidation was passed by the CoC. The Tribunal observed that despite the CoC's direction to seek an extension of the CIRP period, the RP filed for liquidation due to the absence of a resolution plan. The Tribunal highlighted that the RP is obligated to adhere to the decisions of the CoC but noted that the maximum period for CIRP had expired without any resolution plan being approved.

Issue 3: Compliance with Procedural Requirements
The Tribunal addressed the procedural objections raised by the respondent's counsel, emphasizing that hyper-technical objections should not frustrate the proceedings. The Tribunal referenced section 33(1) of the IBC, which allows for liquidation when no resolution plan is received before the expiry of the insolvency resolution process period. The Tribunal concluded that the absence of a resolution plan and the expiration of the CIRP period justified the liquidation order, regardless of the CoC's resolutions or coordination issues.

Order:
The Tribunal ordered the liquidation of the Corporate Debtor, appointing Mr. Kondapalli Venkata Srinivas as the Liquidator. The moratorium declared under section 14 of the I&B Code ceased, and the Liquidator was directed to manage the liquidation process as per the relevant regulations. The Tribunal also provided specific instructions regarding the conduct of the liquidation process, including the sale of the Corporate Debtor or its business as a going concern within 90 days.

Conclusion:
The application for liquidation was allowed, and the Tribunal emphasized the importance of adhering to the timelines and objectives of the Insolvency & Bankruptcy Code, 2016. The Tribunal dismissed hyper-technical objections and focused on the substantive issues, ensuring that the liquidation process proceeded efficiently.

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