IBC liquidation under CoC resolution upheld after failed resolution plan and appointment of the liquidator

Where the Committee of Creditors resolved to liquidate the corporate debtor after the only resolution plan was found unfeasible and rejected, the Tribunal held that the statutory conditions for liquidation under Section 33(2) of the Insolvency and Bankruptcy Code were satisfied. Repeated invitations for expression of interest had not produced a viable resolution process outcome, and the Resolution Professional had duly intimated the CoC's liquidation decision with the requisite voting share. The corporate debtor was therefore directed into liquidation, and the proposed Resolution Professional was appointed as liquidator.

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Issues: Whether, on the Committee of Creditors having resolved to liquidate the corporate debtor and the resolution plan having been rejected, the corporate debtor was liable to be placed under liquidation and a liquidator appointed.

Analysis: The application was founded on Section 33(2) of the Insolvency and Bankruptcy Code, 2016, which requires the Adjudicating Authority to pass a liquidation order where the Resolution Professional intimates the decision of the Committee of Creditors, approved by the requisite voting share, to liquidate the corporate debtor. The record showed that several rounds of invitation for Expression of Interest had yielded no viable resolution process outcome, and the only resolution plan received was found unfeasible and rejected by the Committee of Creditors. The Committee of Creditors thereafter resolved to liquidate the corporate debtor and to appoint the existing Resolution Professional as liquidator. The Tribunal found that the statutory conditions for liquidation were satisfied.

Conclusion: The request for liquidation was allowed, the corporate debtor was directed to be liquidated, and the proposed liquidator was appointed.

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