Liquidation after failed resolution process under the Insolvency and Bankruptcy Code where no plan was approved

Liquidation may be initiated under the Insolvency and Bankruptcy Code, 2016 where the CIRP period expires without approval of any resolution plan and no valid extension is obtained. On that basis, the tribunal accepted the resolution professional's request for liquidation, noted that no resolution plan had been received within the statutory period, and found that the committee of creditors had not secured the requisite approval for extension. It then directed appointment of the liquidator, cessation of the earlier moratorium, commencement of the liquidation moratorium, and conduct of proceedings in accordance with the Code and applicable regulations.

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Issues: Whether liquidation of the corporate debtor should be ordered under the Insolvency and Bankruptcy Code, 2016 when the corporate insolvency resolution process period had expired and no resolution plan had been approved.

Analysis: The application was filed by the resolution professional seeking liquidation after expiry of the CIRP period. The record showed that no resolution plan had been received within the statutory period, and the request for extension did not secure the requisite approval of the committee of creditors. In these circumstances, the case satisfied the statutory basis for initiation of liquidation under the Code. Consequential directions were issued for appointment of the liquidator, cessation of the earlier moratorium, commencement of the fresh moratorium under liquidation, and conduct of liquidation proceedings in accordance with the Code and the applicable regulations.

Conclusion: Liquidation was ordered and the application for liquidation was allowed.

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