Tribunal orders liquidation of Corporate Debtor for failure to infuse funds as per Resolution Plan

The Tribunal ordered the liquidation of the Corporate Debtor due to the Resolution Applicant's failure to infuse funds as agreed in the approved Resolution Plan, contravening the Insolvency and Bankruptcy Code. The Tribunal emphasized the importance of adhering to commitments, maximizing stakeholder value through liquidation as the Liquidation Value exceeded the Plan amount. The Financial Creditor's application under Section 33(3) was allowed, appointing the former Resolution Professional as the Liquidator to proceed with the liquidation process promptly.

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Issues: Application for liquidation of Corporate Debtor due to failure to implement Resolution Plan and infuse funds as agreed.

Analysis:
1. The Application was filed under Section 33(3) of the I & B Code, 2016 by the Financial Creditor to order liquidation of the Corporate Debtor and appoint the Resolution Professional as the Liquidator.

2. The Resolution Plan submitted by the Resolution Applicant was approved, but the Applicant failed to infuse funds as agreed, leading to a request for modification and extension of timelines in the Resolution Plan.

3. The Monitoring Committee found that the Resolution Applicant failed to infuse funds as per the Plan, indicating financial inability to meet commitments, significantly prejudicing the interests of the Applicant.

4. The Liquidation Value of the Company exceeded the amount offered in the Resolution Plan, justifying the maximization of stakeholder value through liquidation.

5. The Tribunal noted the contravention of the Resolution Plan by the Resolution Applicant, emphasizing the importance of adhering to agreed timelines and commitments.

6. Citing relevant provisions of the Insolvency and Bankruptcy Code, the Tribunal highlighted the right to apply for liquidation if the Resolution Plan is contravened, which was exercised by the Financial Creditor in this case.

7. Considering the interests of stakeholders and the failure of the Resolution Applicant to honor commitments, the Tribunal invoked Section 33(3) and (4) to order the liquidation of the Corporate Debtor.

8. The proposed Liquidator was directed to submit the prescribed form accepting the appointment to proceed with the liquidation process.

9. Consequently, the Application was allowed, and the Corporate Debtor was placed under liquidation with immediate effect, appointing the former Resolution Professional as the Liquidator subject to submission of written consent within a week, with specific directions on discharging duties in accordance with the IBC, 2016.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision to order the liquidation of the Corporate Debtor based on the failure to implement the approved Resolution Plan.

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