CIRP exclusion and liquidation follow where no resolution plan emerges and the insolvency process has expired.

The NCLT Kolkata Bench considered exclusion of 24.03.2020 to 03.02.2021 from the CIRP period, noting that the CoC had resolved to liquidate the corporate debtor and that the process was impeded by the COVID-19 lockdown, missing records, absence of information memorandum materials, and no publication of expression of interest. It excluded 317 days from the CIRP period. With no resolution plan received, no Form G published, and the extended CIRP period expired, the tribunal held liquidation was the only available course and ordered liquidation of the corporate debtor with appointment of a liquidator and consequential statutory directions.

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Issues: (i) Whether the period from 24.03.2020 to 03.02.2021 was liable to be excluded from the corporate insolvency resolution process period. (ii) Whether the corporate debtor was required to be liquidated and a liquidator appointed under the Insolvency and Bankruptcy Code, 2016.

Issue (i): Whether the period from 24.03.2020 to 03.02.2021 was liable to be excluded from the corporate insolvency resolution process period.

Analysis: The application sought exclusion of the stated period on the ground that the committee of creditors had, in its commercial wisdom, decided to liquidate the corporate debtor, and the process had been affected by the COVID-19 lockdown and the absence of necessary records, information memorandum materials, and publication of expression of interest. The exclusion was also linked to the fact that the CIRP period had effectively run its course by the time the liquidation decision was taken.

Conclusion: The period of 317 days from 24.03.2020 to 03.02.2021 was excluded from the CIRP period.

Issue (ii): Whether the corporate debtor was required to be liquidated and a liquidator appointed under the Insolvency and Bankruptcy Code, 2016.

Analysis: No resolution plan had been received, no Form G had been published, and the extended CIRP period had expired. In these circumstances, liquidation followed as the only available course. The order also provided for appointment of a liquidator, vesting of powers in the liquidator, cooperation by personnel, institution of liquidation proceedings under the Code and regulations, and consequential directions regarding notice and filing.

Conclusion: The corporate debtor was ordered to be liquidated and the liquidator was appointed.

Final Conclusion: The insolvency resolution process was brought to an end by exclusion of the intervening period and conversion of the matter into liquidation proceedings with all consequential statutory directions.

Ratio Decidendi: Where the CIRP has run its course without a resolution plan and the creditors have resolved to liquidate the corporate debtor, the adjudicating authority may exclude the justified intervening period and order liquidation with appointment of a liquidator under the Code.

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