Liquidation under the Insolvency Code follows a duly approved CoC decision and RP intimation before resolution plan confirmation

Liquidation under the Insolvency and Bankruptcy Code was triggered after the Resolution Professional informed the tribunal that the corporate debtor's records, asset position, and operational details could not be properly ascertained, the information memorandum and EOI process had stalled, and the Committee of Creditors had unanimously approved liquidation. Section 33(2) requires liquidation once the adjudicating authority is notified of a duly approved CoC decision before confirmation of a resolution plan. On that statutory basis, the liquidation provisions were applied and a liquidator was appointed.

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Issues: Whether liquidation of the corporate debtor was warranted under the Insolvency and Bankruptcy Code, 2016 on the Resolution Professional's intimation of the Committee of Creditors' decision supported by the requisite voting share.

Analysis: The Resolution Professional reported that the corporate debtor's financial records, asset position, and operational particulars could not be ascertained despite efforts, the information memorandum and expression of interest process had stalled, and the Committee of Creditors had unanimously resolved to liquidate the corporate debtor. Section 33(2) of the Insolvency and Bankruptcy Code, 2016 mandates liquidation where the Resolution Professional intimates the adjudicating authority of a duly approved decision of the Committee of Creditors to liquidate before confirmation of a resolution plan. In these circumstances, the statutory precondition stood satisfied and liquidation consequences under the liquidation regulations were also attracted.

Conclusion: Liquidation of the corporate debtor was ordered and a liquidator was appointed.

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