Liquidation under insolvency law followed expiry of resolution timelines and rejection of the only resolution plan as not viable.

Liquidation of the corporate debtor was ordered under the Insolvency and Bankruptcy Code after the corporate insolvency resolution process ended without an approved resolution plan. The only plan received was rejected by the Committee of Creditors as not viable, and the extended resolution timelines, including the COVID-19 exclusion period, had expired. On that basis, the statutory conditions for liquidation were treated as satisfied, and consequential directions followed for appointment of the liquidator, public announcement, cessation of moratorium, and conduct of liquidation under the applicable regulations.

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Issues: Whether liquidation of the corporate debtor was liable to be ordered under section 33 of the Insolvency and Bankruptcy Code, 2016 when no resolution plan had been approved by the Committee of Creditors and the resolution process had exhausted the permissible timeline.

Analysis: The corporate insolvency resolution process had run its course without any approved resolution plan. The only resolution plan received was rejected by the Committee of Creditors as not viable. The record also showed that the extended timelines, including the period excluded on account of the COVID-19 lockdown, had expired. In these circumstances, the statutory conditions for liquidation under section 33(1) stood satisfied. The consequential directions regarding appointment of the liquidator, public announcement, cessation of moratorium, and conduct of liquidation followed the liquidation order and the applicable liquidation regulations.

Conclusion: Liquidation was ordered and the corporate debtor was directed to be liquidated with all consequential statutory directions.

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