Corporate Debtor Enters Liquidation as Resolution Plan Fails

The Adjudicating Authority granted the liquidation order for the Corporate Debtor under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016, as no Resolution Plan was approved within the stipulated time frame. The Resolution Professional was appointed as the Company Liquidator, and the moratorium was ceased. Assets were to be disposed of on a "going concern" basis, with detailed procedures outlined for the liquidation process.

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Issues Involved:
1. Application for liquidation of Corporate Debtor under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016.
2. Approval of Resolution Plans by Committee of Creditors (COCs) within the stipulated time period.
3. Extension of Corporate Insolvency Resolution Process (CIRP) period beyond 180 days.
4. Disposal of assets in liquidation as a "going concern" basis.
5. Appointment of Company Liquidator and cessation of moratorium.

Analysis:

1. The Miscellaneous Application was filed seeking an order for liquidation of the Corporate Debtor under Sections 33(1)(a) and 34(1) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional requested permission for the disposal of assets on a "going concern" basis. The COCs did not object to the liquidation order.

2. The Corporate Insolvency Resolution Process (CIRP) was initiated under Section 7 of the I&B Code by Financial Creditors against the Corporate Debtor. The Resolution Professional was appointed, and the COCs recommended an extension of the CIRP period beyond 180 days. However, no Resolution Plan was approved within the stipulated time frame.

3. The CIRP period was extended by the Authority for 90 days on the COCs' recommendation, which later expired. Despite efforts to solicit Resolution Plans, none were approved by the COCs within the maximum period permitted under the Code.

4. The Resolution Professional highlighted that the offers from Resolution Applicants were deemed too low by the COCs, and the valuation of the factory premises was not considered adequate. As a result, the Adjudicating Authority proceeded to pass a Liquidation Order as per Section 33(1)(a) of the Code.

5. The Liquidation Order appointed the Resolution Professional as the Company Liquidator, ceased the moratorium declared under Section 14 of the I&B Code, and outlined the procedures for liquidation. The Liquidator was permitted to continue the operations of the Corporate Debtor and dispose of assets on a "going concern" basis. The Order also detailed the powers and duties of the Company Liquidator, including fee entitlement and cooperation from Corporate Debtor personnel.

This comprehensive analysis of the judgment provides a detailed overview of the issues involved and the decision rendered by the Adjudicating Authority in the matter.

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