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Issues: Whether the Tribunal's approval of liquidation of the corporate debtor and its acceptance of a composite sale approach involving the mortgaged property could be interfered with on the ground that the appellant's personal property had been brought into the resolution process.
Analysis: The corporate debtor had only limited leasehold/business utility in the subject premises, the first round of invitation for expressions of interest yielded no resolution plan, and the second round also failed to produce a viable resolution proposal. The CoC thereafter approved liquidation by an overwhelming majority. The objection that the appellant's mortgaged property could not be considered was not accepted, since the facts showed that the property was integrally connected with the functioning and access of the corporate debtor's business premises, and the appellant had participated in the CIRP meetings after the issue was discussed. The Tribunal's view that interim moratorium under Section 96(1)(a) of the Insolvency and Bankruptcy Code, 2016 did not obstruct the CIRP or the liquidation decision was upheld. The reliance on the possibility of composite sale was also found consistent with the principle of value maximisation and with earlier decisions permitting composite sale of connected properties.
Conclusion: The challenge to the liquidation order failed, and the approval of liquidation and the connected treatment of the property was sustained against the appellant.
Ratio Decidendi: A CoC decision to liquidate a corporate debtor, taken in its commercial wisdom after unsuccessful resolution efforts, will not be interfered with merely because the asset structure involves connected mortgaged property of promoters or guarantors, where composite sale is shown to be necessary for value maximisation.
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