Early dissolution in insolvency may be ordered when no resolution plan emerges and liquidation serves no practical purpose.

Where no resolution plan was received, the corporate debtor had ceased operations, its assets were realised, and liquidation was considered unnecessary, the Tribunal treated early dissolution as permissible in exercise of its insolvency powers and inherent procedural powers. It ordered dissolution with immediate effect because continuation of liquidation would serve no practical purpose. On distribution of the remaining balance, the Tribunal applied the statutory priority framework and permitted pro-rata payment to workmen after provision for bank charges, in line with the approved claim distribution.

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Issues: (i) Whether the corporate debtor could be dissolved at the CIRP stage by invoking the Tribunal's powers where no resolution plan was received, the assets had been realised, and liquidation was considered unnecessary; (ii) Whether the remaining balance could be directed to be paid to workmen on a pro-rata basis before dissolution.

Issue (i): Whether the corporate debtor could be dissolved at the CIRP stage by invoking the Tribunal's powers where no resolution plan was received, the assets had been realised, and liquidation was considered unnecessary.

Analysis: The application was founded on Section 54 of the Insolvency and Bankruptcy Code, 2016, read with the Tribunal's inherent powers under Rule 11 of the National Company Law Tribunal Rules, 2016, and on the scheme of the Code that permits expeditious resolution or closure of the process. The record showed that no resolution applicant had come forward, the company had ceased operations, its assets had been realised, and the Committee of Creditors had approved dissolution as a special case. In these circumstances, continuation of liquidation was treated as serving no useful purpose.

Conclusion: The prayer for dissolution was allowed, and the corporate debtor was ordered to be dissolved with immediate effect.

Issue (ii): Whether the remaining balance could be directed to be paid to workmen on a pro-rata basis before dissolution.

Analysis: The Tribunal noted that the realised amounts had been substantially disbursed, while the balance remained available for workmen's dues. Applying the distribution priority under Section 53 of the Insolvency and Bankruptcy Code, 2016, and the approval of the Committee of Creditors, the Tribunal found it to permit payment of the remaining amount to workmen on a pro-rata basis after provision for bank charges.

Conclusion: The Resolution Professional was permitted and directed to make pro-rata payment to workmen from the remaining balance.

Final Conclusion: The application succeeded, the corporate debtor stood dissolved, and the remaining proceeds were directed to be distributed in accordance with the approved claim priority.

Ratio Decidendi: Where no resolution plan is received, the corporate debtor has ceased operations, its assets have been realised, and liquidation would serve no practical purpose, the Tribunal may order early dissolution in exercise of its powers under the Insolvency and Bankruptcy Code and its inherent procedural powers, subject to lawful distribution of remaining realised amounts.

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