Liquidation follows when CIRP time limits expire without an approved resolution plan, and a later promoter plan cannot ?

Once the maximum period for completion of the corporate insolvency resolution process expires without acceptance of a resolution plan, liquidation follows as a statutory consequence under the Insolvency and Bankruptcy Code, 2016. Where the extension beyond 330 days has been declined, the conditions for liquidation under Section 33(1) are attracted, and a later resolution plan submitted by the promoters does not displace that outcome. Revival in liquidation remains possible only in accordance with the Code and the applicable liquidation regulations, including the relevant eligibility requirements.

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Issues: Whether the corporate debtor was liable to be ordered into liquidation upon expiry of the maximum permissible period for completion of the corporate insolvency resolution process, and whether the submission of a resolution plan by the promoters could defer liquidation.

Analysis: The maximum period for completion of the corporate insolvency resolution process had already expired and the request for extension beyond 330 days had been declined. On that footing, the conditions for liquidation under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 stood attracted. The subsequent submission of a resolution plan by the promoters did not displace the statutory consequence of liquidation once the resolution period had run out. The order also recognised that, even in liquidation, the promoter could pursue revival only in accordance with the Code and the applicable liquidation regulations, including eligibility requirements.

Conclusion: The corporate debtor was ordered to be liquidated and the liquidator was appointed.

Ratio Decidendi: Once the maximum period for completion of the corporate insolvency resolution process expires without a resolution plan being accepted, liquidation follows as a statutory mandate under Section 33(1) of the Insolvency and Bankruptcy Code, 2016.

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