Committee of creditors' commercial wisdom prevails in liquidation decisions absent procedural illegality or statutory infirmity.

Liquidation may be ordered when the committee of creditors, acting within the insolvency framework, rejects a resolution plan and opts for liquidation. The tribunal will not substitute its view for the committee's commercial wisdom merely because a promoter-director offers a higher value or relies on a pending arbitration claim. In the absence of any pleaded procedural illegality or infirmity in the decision-making process, there is no basis to interfere with the committee's choice to proceed with liquidation, and the liquidation process must continue under the applicable insolvency and liquidation regulations.

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Issues: Whether the corporate debtor was liable to be taken into liquidation on the resolution professional's application under the insolvency framework, and whether the tribunal could interfere with the committee of creditors' commercial decision to reject the resolution plan.

Analysis: The committee of creditors had considered the resolution plans, the financial position of the corporate debtor, and the comparative value and payment terms offered. It resolved by 100% vote share to proceed with liquidation. The tribunal held that, where the prescribed procedure has been followed, the commercial decision of the committee of creditors cannot be substituted by the tribunal merely because the promoter-directors proposed a higher value or pointed to a pending arbitration claim. In the absence of any pleaded procedural infirmity in the decision-making process, no ground was made out to disturb the committee's choice to seek liquidation.

Conclusion: The application for liquidation was allowed and the corporate debtor was ordered to be liquidated. The tribunal appointed the liquidator, directed cessation of the earlier moratorium and commencement of the liquidation moratorium, and required liquidation to proceed in accordance with the Insolvency and Bankruptcy Code, 2016 and the applicable liquidation regulations.

Final Conclusion: The decision affirms that liquidation may be ordered when the committee of creditors, acting within the statutory framework, resolves against approval of a resolution plan and no procedural illegality is shown.

Ratio Decidendi: The tribunal will not interfere with the committee of creditors' commercial wisdom in choosing liquidation over resolution unless a legal or procedural violation is established.

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