Liquidation as last resort under insolvency law, with revival and Section 230 compromise to be explored before asset sale.

Liquidation under the Insolvency and Bankruptcy Code is treated as a last resort, with revival and continuation of the corporate debtor remaining the primary objective. Where no live resolution plan survives, interference with liquidation orders may be declined. At the liquidation stage, the liquidator should keep the corporate debtor as a going concern, verify claims, take custody and control of assets, and first explore a compromise or arrangement under Section 230 of the Companies Act, 2013 before any piecemeal sale of assets. The Adjudicating Authority may pass further orders if required during that process.

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Issues: (i) Whether the liquidation orders passed under the Insolvency and Bankruptcy Code, 2016 called for interference in appeal. (ii) Whether the liquidator should first explore revival and compromise or arrangement under Section 230 of the Companies Act, 2013 while keeping the corporate debtor as a going concern before selling its assets.

Issue (i): Whether the liquidation orders passed under the Insolvency and Bankruptcy Code, 2016 called for interference in appeal.

Analysis: The appeals were filed against liquidation orders, but the earlier resolution applicant appeals had already been withdrawn and no resolution plan survived. The statutory scheme treats liquidation as a last resort, with the primary focus remaining on revival and continuation of the corporate debtor. In that background, and in light of the absence of any live resolution plan, there was no basis to interfere with the liquidation orders.

Conclusion: The challenge to the liquidation orders was not accepted and interference was declined.

Issue (ii): Whether the liquidator should first explore revival and compromise or arrangement under Section 230 of the Companies Act, 2013 while keeping the corporate debtor as a going concern before selling its assets.

Analysis: The statutory framework, read with the decisions relied upon, permits the liquidator to keep the corporate debtor as a going concern and to explore a compromise or arrangement under Section 230 of the Companies Act, 2013 before proceeding to piecemeal sale of assets. The liquidator was therefore directed to verify claims, take custody and control of assets, carry on the business for beneficial liquidation, and first proceed under Section 230 before any sale of assets, with the Adjudicating Authority to pass appropriate orders if required.

Conclusion: The liquidator was required to pursue the revival route under Section 230 and keep the corporate debtor as a going concern before sale of assets.

Final Conclusion: The appeals were disposed of without disturbing the liquidation orders, while directing the liquidator to undertake the revival and compromise process in accordance with law before resorting to sale of assets.

Ratio Decidendi: In liquidation proceedings, revival and continuation of the corporate debtor must be explored first, including recourse to Section 230 of the Companies Act, 2013, and liquidation remains a last resort when no viable resolution plan survives.

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