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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the corporate debtor was liable to be placed in liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 on the basis of the Committee of Creditors' decision. (ii) Whether the resolution professional could be appointed as liquidator and the usual consequential directions could be issued.
Issue (i): Whether the corporate debtor was liable to be placed in liquidation under section 33(2) of the Insolvency and Bankruptcy Code, 2016 on the basis of the Committee of Creditors' decision.
Analysis: The record showed that no resolution plan had been received during the Corporate Insolvency Resolution Process and that the Committee of Creditors had unanimously resolved to liquidate the corporate debtor. The statutory threshold under section 33(2), namely approval by not less than sixty-six per cent of the voting share before confirmation of a resolution plan, stood satisfied. In such a situation, the Adjudicating Authority was bound to pass a liquidation order.
Conclusion: The corporate debtor was directed to be taken into liquidation.
Issue (ii): Whether the resolution professional could be appointed as liquidator and the usual consequential directions could be issued.
Analysis: The resolution professional had furnished written consent to act as liquidator and had also produced the requisite authorization for assignment. The order therefore appointed the proposed professional as liquidator and issued directions regarding public announcement, discharge of employees, investigation of the corporate debtor's affairs, communication to statutory authorities, cessation of the existing moratorium, and filing of reports during liquidation.
Conclusion: The resolution professional was appointed as liquidator and the consequential liquidation directions were issued.
Final Conclusion: The application was allowed and the corporate debtor was ordered into liquidation with the proposed liquidator to proceed in accordance with the insolvency framework.
Ratio Decidendi: Once the Committee of Creditors approves liquidation with the requisite voting share before confirmation of a resolution plan, the Adjudicating Authority must order liquidation and may appoint a qualified consenting resolution professional as liquidator.
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