Liquidation under insolvency law follows when no resolution plan emerges and creditors unanimously opt for winding up

Where the corporate insolvency resolution process produced no resolution plan or expression of interest and the Committee of Creditors unanimously resolved to liquidate, the Tribunal applied Section 33 of the Insolvency and Bankruptcy Code, 2016 and ordered liquidation of the corporate debtor. It treated the absence of a specific resolution on contribution towards CIRP or liquidation costs as a curable procedural lapse and waived it for this case. The Resolution Professional was appointed as Liquidator, and the statutory incidents of liquidation followed, including cessation of moratorium, vesting of management powers in the Liquidator, and restrictions on proceedings and asset recovery.

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Issues: Whether the Corporate Debtor should be sent into liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016, and whether the Resolution Professional should be appointed as Liquidator.

Analysis: The Corporate Insolvency Resolution Process had already commenced, the Committee of Creditors had unanimously resolved to liquidate the Corporate Debtor, and no resolution plan or expression of interest was received despite the public process. In these circumstances, the Tribunal treated the absence of a specific resolution on contribution towards CIRP or liquidation costs as a curable procedural lapse and waived that requirement for this case. The Tribunal also noted the statutory consequences flowing from liquidation, including cessation of moratorium, vesting of management powers in the Liquidator, and the application of the restrictions on institution of proceedings and recovery of assets.

Conclusion: Liquidation of the Corporate Debtor was ordered and the Resolution Professional was appointed as Liquidator.

Ratio Decidendi: Where no resolution plan is forthcoming and the Committee of Creditors has resolved to liquidate, the Adjudicating Authority may order liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016 and appoint the Resolution Professional as Liquidator, while giving effect to the statutory incidents of liquidation.

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