CoC-driven liquidation under the Insolvency and Bankruptcy Code permits appointment of the Resolution Professional as Liquidator.
Where the Committee of Creditors validly resolves before approval of a resolution plan to liquidate a corporate debtor with the requisite voting share, section 33(2) of the Insolvency and Bankruptcy Code requires the Adjudicating Authority to order liquidation. Section 34(1) also permits appointment of the Resolution Professional as Liquidator, provided the statutory conditions are met, including possession of a valid Authorisation for Assignment under the applicable regulations. On the stated facts, the CoC resolution carried 99.99% voting share and the Resolution Professional consented to act, so liquidation was directed and the Resolution Professional was appointed as Liquidator subject to compliance with statutory requirements.
Issues: Whether the Corporate Debtor was liable to be placed in liquidation on the basis of the Committee of Creditors' decision, and whether the Resolution Professional could be appointed as Liquidator.
Analysis: Section 33(2) of the Insolvency and Bankruptcy Code, 2016 requires the Adjudicating Authority to order liquidation where, before confirmation of a resolution plan, the Resolution Professional communicates a CoC decision supported by not less than sixty-six per cent voting share to liquidate the corporate debtor. The record showed that the CoC had resolved to liquidate the Corporate Debtor with 99.99% voting share. The Resolution Professional also furnished consent to act as Liquidator, and section 34(1) permitted such appointment, subject to possession of a valid Authorisation for Assignment under regulation 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2019.
Conclusion: The Corporate Debtor was ordered to be liquidated and the Resolution Professional was appointed as Liquidator, subject to compliance with the statutory requirements.
Final Conclusion: The liquidation process was set in motion in accordance with the Code, with the Liquidator assuming control of the corporate debtor's affairs and the consequential statutory incidents following liquidation becoming operative.
Ratio Decidendi: Where the Committee of Creditors validly resolves, by the requisite voting share, to liquidate the corporate debtor before approval of a resolution plan, the Adjudicating Authority must order liquidation and may appoint the Resolution Professional as Liquidator if the statutory conditions for such appointment are satisfied.
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