Liquidation under the Insolvency Code follows when no resolution plan is received and creditors unanimously recommend it

Where no resolution plan was received during the corporate insolvency resolution process and the committee of creditors unanimously recommended liquidation, the corporate debtor was directed into liquidation under the Insolvency and Bankruptcy Code. The adjudicating authority also appointed the existing resolution professional as liquidator because he had been proposed by the committee of creditors and his consent and authorization for assignment were on record. The liquidation process was therefore placed under the charge of the appointed liquidator in accordance with the insolvency framework.

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Issues: (i) Whether liquidation of the corporate debtor was warranted for failure to receive any resolution plan. (ii) Whether the resolution professional could be appointed as liquidator.

Issue (i): Whether liquidation of the corporate debtor was warranted for failure to receive any resolution plan.

Analysis: The application was moved by the resolution professional on the instructions of the committee of creditors after the corporate insolvency resolution process did not yield any resolution plan. The committee of creditors had unanimously recommended liquidation, and the record showed that the attempts to revive the corporate debtor had not succeeded.

Conclusion: Liquidation of the corporate debtor was ordered under section 33(1) of the Insolvency and Bankruptcy Code, 2016.

Issue (ii): Whether the resolution professional could be appointed as liquidator.

Analysis: The committee of creditors proposed the existing resolution professional as liquidator, and his consent and authorization for assignment were on record. The order therefore proceeded to appoint him as liquidator in terms of the Code and the applicable regulations.

Conclusion: The resolution professional was appointed as liquidator under section 34(1) of the Insolvency and Bankruptcy Code, 2016.

Final Conclusion: The corporate debtor was directed into liquidation, and the liquidation process was placed under the charge of the appointed liquidator in accordance with the insolvency framework.

Ratio Decidendi: Where no resolution plan is received and the committee of creditors recommends liquidation, the adjudicating authority may order liquidation and appoint the proposed resolution professional as liquidator if the statutory requirements are satisfied.

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