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Issues: (i) Whether liquidation of the corporate debtor was warranted under section 33(1) of the Insolvency and Bankruptcy Code, 2016 in the absence of an approved resolution plan and on expiry of the corporate insolvency resolution process period; (ii) whether the objection seeking fresh valuation of the corporate debtor's assets warranted interference.
Issue (i): Whether liquidation of the corporate debtor was warranted under section 33(1) of the Insolvency and Bankruptcy Code, 2016 in the absence of an approved resolution plan and on expiry of the corporate insolvency resolution process period.
Analysis: The Committee of Creditors had considered the available resolution plans and, after the proposed plan failed to secure the requisite voting share, resolved to seek liquidation. The corporate insolvency resolution process had also expired without any successful resolution plan. In such circumstances, section 33(1) mandated liquidation in accordance with the Code. The Resolution Professional had also expressed consent to act as liquidator, enabling appointment under section 34(1).
Conclusion: Liquidation was held to be warranted and the application was allowed on this issue.
Issue (ii): Whether the objection seeking fresh valuation of the corporate debtor's assets warranted interference.
Analysis: The Resolution Professional had complied with regulation 27 by appointing two registered valuers within the prescribed time and, because of the wide variation in their reports, a third valuer was also appointed. The objection did not demonstrate any legally sustainable ground such as conflict of interest or breach of the valuation framework under regulation 35. A mere fall in asset value was not a basis to direct a fresh valuation.
Conclusion: The objection for fresh valuation was rejected.
Final Conclusion: The corporate debtor was ordered into liquidation, the liquidator was appointed, and ancillary directions were issued for carrying out the liquidation process under the Code and the liquidation regulations.
Ratio Decidendi: Where the Committee of Creditors does not approve a resolution plan within the statutory CIRP period, liquidation under section 33 follows as a mandatory consequence, and a fresh valuation will not be ordered absent a legally cognizable defect in the valuation process.
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