Liquidation under the Insolvency Code follows when no resolution plan is approved and creditors resolve to liquidate.

Where the Committee of Creditors did not approve any resolution plan and resolved to liquidate the corporate debtor, the statutory conditions for liquidation under the Insolvency and Bankruptcy Code, 2016 were satisfied. The tribunal noted that two resolution plans had been received but neither secured approval, and that the insolvency resolution process requirements were complied with. Liquidation was therefore ordered, with appointment of a liquidator and consequential directions for cessation of moratorium, vesting of powers in the liquidator, and conduct of the liquidation in accordance with the Code and the liquidation regulations.

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Issues: Whether the corporate debtor was liable to be placed into liquidation on the failure of the Committee of Creditors to approve any resolution plan and whether a liquidator was required to be appointed.

Analysis: Two resolution plans were received but neither was approved by the Committee of Creditors. The sole member of the Committee of Creditors resolved to liquidate the corporate debtor, and the record showed compliance with the insolvency resolution process requirements. In these circumstances, the statutory conditions for passing a liquidation order were satisfied, and consequential directions were required regarding cessation of moratorium, appointment of a liquidator, vesting of powers in the liquidator, and conduct of the liquidation in accordance with the Code and the liquidation regulations.

Conclusion: The application was allowed and liquidation of the corporate debtor was ordered with appointment of a liquidator and consequential directions.

Ratio Decidendi: Where the Committee of Creditors does not approve any resolution plan and resolves for liquidation, the adjudicating authority may pass a liquidation order and appoint a liquidator under the Insolvency and Bankruptcy Code, 2016.

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