Mandatory liquidation on failure of resolution plan under insolvency law, with appointment of a liquidator and statutory consequences

Expiry of the corporate insolvency resolution process without receipt of any resolution plan required liquidation under Section 33 of the Insolvency and Bankruptcy Code, 2016. The Tribunal noted that the process had been extended and no plan was received despite publication of Form G, so the statutory basis for resolution had failed. It therefore treated liquidation as mandatory, appointed the proposed insolvency professional as liquidator subject to a valid authorisation for assignment, and directed the usual consequences under the Code, including transfer of control, cessation of board powers, restriction on proceedings, and compliance filings.

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Issues: Whether, on expiry of the corporate insolvency resolution process without receipt of any resolution plan, liquidation of the corporate debtor ought to be ordered and a liquidator appointed.

Analysis: The application was founded on the absence of any resolution plan despite publication of Form G and completion of the extended corporate insolvency resolution process period. The statutory scheme under Section 33 of the Insolvency and Bankruptcy Code, 2016 requires liquidation where no resolution plan is received before the expiry of the resolution process, and also permits liquidation when the committee of creditors has approved liquidation in the prescribed voting share. On that basis, the Tribunal held that it had no option but to order liquidation. It further appointed the proposed insolvency professional as liquidator, subject to a valid authorisation for assignment, and issued consequential directions regarding assumption of control, notice, cessation of board powers, restriction on proceedings, discharge consequences, and filing with the Registrar of Companies.

Conclusion: Liquidation of the corporate debtor was ordered and the proposed liquidator was appointed, with consequential directions under the Code.

Final Conclusion: The application succeeded, and the corporate debtor was directed into liquidation in accordance with the insolvency framework.

Ratio Decidendi: Where the corporate insolvency resolution process expires without any resolution plan, the adjudicating authority is bound to order liquidation and give effect to the statutory consequences that follow.

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