Liquidation after failed CIRP plan process follows CoC commercial wisdom and triggers statutory liquidation consequences.

Where the CIRP expires without any resolution plan and the committee of creditors, in its commercial wisdom, resolves to liquidate the corporate debtor, liquidation may be ordered under the Insolvency and Bankruptcy Code, 2016 absent legal infirmity. Once liquidation is directed, the resolution professional may be appointed as liquidator if consent is furnished, and the statutory incidents of liquidation follow, including public announcement, the liquidation moratorium, notice to employees and workmen, and compliance with reporting and intimation requirements under the Code and liquidation regulations.

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Issues: (i) Whether liquidation of the corporate debtor was warranted on failure to receive a resolution plan within the CIRP period and on the decision of the committee of creditors; (ii) Whether the resolution professional was liable to be appointed as liquidator and the ancillary consequences of liquidation were required to follow.

Issue (i): Whether liquidation of the corporate debtor was warranted on failure to receive a resolution plan within the CIRP period and on the decision of the committee of creditors.

Analysis: The application was founded on the expiry of the corporate insolvency resolution process without receipt of any resolution plan. The committee of creditors, after noting the absence of any expression of interest and the failure of resolution efforts, resolved with a substantial voting share to liquidate the corporate debtor. The statutory framework under Section 33 of the Insolvency and Bankruptcy Code, 2016 permits liquidation where no resolution plan is received within the prescribed period, and the commercial decision of the committee of creditors is not to be interfered with absent legal infirmity.

Conclusion: Liquidation was ordered and the corporate debtor was held liable to be wound up in liquidation.

Issue (ii): Whether the resolution professional was liable to be appointed as liquidator and the ancillary consequences of liquidation were required to follow.

Analysis: The resolution professional had furnished consent to act as liquidator. Once liquidation was directed, the statutory incidents of liquidation followed, including appointment of the liquidator, issuance of public announcement, cessation of the earlier moratorium and commencement of the liquidation moratorium, notice of discharge to employees and workmen, and compliance with reporting and intimation requirements to the concerned authorities under the Code and the liquidation regulations.

Conclusion: The resolution professional was appointed as liquidator and all consequential directions were issued.

Final Conclusion: The application succeeded and the corporate debtor entered liquidation with the designated liquidator tasked to carry forward the liquidation process in accordance with the insolvency framework.

Ratio Decidendi: Where the committee of creditors has, in its commercial wisdom, resolved to liquidate the corporate debtor after the CIRP fails to yield any resolution plan within the statutory period, the Adjudicating Authority may order liquidation and give effect to the statutory consequences flowing from such order.

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