Liquidation under the Insolvency Code follows when resolution fails and creditors resolve to liquidate the corporate debtor.

Where the insolvency resolution process failed to produce an approved and viable resolution plan, and the Committee of Creditors resolved to liquidate the corporate debtor, the Adjudicating Authority treated the requirements of Section 33 of the Insolvency and Bankruptcy Code, 2016 as satisfied. The Tribunal accordingly directed liquidation, appointed the resolution professional as liquidator, ordered cessation of the board's powers, and issued the usual consequential directions on public announcement, moratorium, and notice to employees and workmen.

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Issues: Whether the corporate debtor was liable to be directed into liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 on the failure of the resolution process and the decision of the Committee of Creditors to liquidate.

Analysis: The application was founded on the expiry of the resolution process period, the rejection of the revised resolution plans, and the express decision of the sole financial creditor in the Committee of Creditors to proceed with liquidation. The statutory condition under Section 33 was satisfied once the resolution process did not result in an approved and viable resolution plan and the Committee of Creditors resolved to liquidate the corporate debtor. The Tribunal also issued consequential directions regarding appointment of the resolution professional as liquidator, cessation of the board's powers, public announcement, continuation and cessation of moratorium as provided by the Code, and treatment of the order as notice of discharge to employees and workmen.

Conclusion: The corporate debtor was ordered to be liquidated and the application was allowed.

Final Conclusion: Liquidation was directed as the resolution process had failed and the statutory requirements for liquidation under the Code were met, with all consequential directions flowing from that order.

Ratio Decidendi: Where the insolvency resolution process fails to yield an approved resolution plan and the Committee of Creditors resolves to liquidate, the Adjudicating Authority is bound to pass a liquidation order under Section 33 of the Insolvency and Bankruptcy Code, 2016.

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