Liquidation and CIRP cost ratification: tribunal directs a new liquidator and creditor approval for costs.

Where the CIRP period had expired, no resolution plan or constructive proposal was pending, and the corporate debtor was not a going concern, liquidation was permitted. In view of serious allegations raised by the financial creditors against the resolution professional, the Tribunal directed that a different person be appointed as liquidator rather than the existing resolution professional. The claim for CIRP costs was not finally allowed in the liquidation application itself; the bills and supporting particulars were directed to be placed before the committee of creditors for ratification and approval within the time fixed by the Tribunal.

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Issues: (i) Whether liquidation of the corporate debtor should be ordered and a different liquidator appointed in view of the allegations against the resolution professional; (ii) Whether the claim for CIRP costs required consideration by the committee of creditors.

Issue (i): Whether liquidation of the corporate debtor should be ordered and a different liquidator appointed in view of the allegations against the resolution professional.

Analysis: The corporate insolvency resolution process had run beyond the permissible period, no resolution plan or other constructive proposal was pending, and the company was not a going concern. The financial creditors, holding the overwhelming voting share in the committee of creditors, had raised serious allegations regarding the conduct of the resolution professional. In those circumstances, the resolution professional was not appointed as liquidator and a different person was appointed to conduct the liquidation.

Conclusion: Liquidation of the corporate debtor was ordered and the existing resolution professional was not appointed as liquidator.

Issue (ii): Whether the claim for CIRP costs required consideration by the committee of creditors.

Analysis: The request for payment of CIRP costs was not treated as maintainable within the liquidation application itself. The bills and supporting particulars had not been placed before the committee of creditors for ratification, and the respondents had not filed a counter on that application. The applicant was therefore directed to place the bills before the committee of creditors for approval within the time fixed by the Tribunal.

Conclusion: The claim for CIRP costs was not finally allowed in this order and was directed to be placed before the committee of creditors for approval.

Final Conclusion: The liquidation process was permitted to proceed with a newly appointed liquidator, while the claim for CIRP costs was kept for consideration in the manner directed by the Tribunal.

Ratio Decidendi: Where the CIRP period has expired, no resolution plan is pending, and serious allegations by the committee of creditors exist against the resolution professional, the Tribunal may order liquidation and appoint another liquidator, while any claim for CIRP costs may require creditor ratification before payment.

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