Inclusion of personal property in CIRP upheld; CoC liquidation decision stands for lack of viable resolution plan.

The CoC determined that including the appellant's adjacent personal immovable property in the CIRP was necessary to maximise realisation because the corporate debtor's limited assets and a landlocked leasehold showroom made composite sale the only viable route; financial creditor support and reserved security rights informed that choice. The tribunal applied principles treating mortgaged guarantor property within composite asset realisation and held that interim moratoria on personal guarantors do not prevent CIRP actions against the corporate debtor. The CoC's commercially driven liquidation decision, supported by overwhelming votes and compliant procedure, was upheld and the appeal dismissed.

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Issues: (i) Whether the inclusion of the appellant's personal immovable property in the corporate insolvency resolution process (CIRP) of the corporate debtor and the decision of the committee of creditors (CoC) to liquidate the corporate debtor can be interfered with by the appellate tribunal.

Analysis: The CoC conducted two rounds of invitation for expression of interest and, having regard to the limited assets of the corporate debtor and the landlocked layout where the corporate debtor's leasehold showroom adjoined the personal freehold/mortgaged land of the promoters, concluded that inclusion of the larger property in the CIRP was necessary for value maximisation. The financial creditor (SBI) communicated that inclusion was essential to attract viable resolution plans and reserved its rights over proceeds attributable to its security. The suspended promoters participated in CoC meetings and received notices and minutes; objections were raised subsequently. Precedent and regulatory context were considered in relation to composite sale and treatment of mortgaged guarantor property in insolvency and liquidation proceedings, and the tribunal's reasoning that interim moratoriums applicable to personal guarantors do not bar CIRP actions against the corporate debtor or decisions of the CoC was applied to the facts. The CoC's decision to liquidate, supported by overwhelming voting share, was assessed as a commercial decision not warranting interference where no viable resolution plan existed and procedural requirements were observed.

Conclusion: The inclusion of the appellant's personal property in the CIRP process for purposes of maximising asset value and the CoC's decision to liquidate the corporate debtor are upheld; the appeal is dismissed and the tribunal's order is affirmed (in favour of Respondent).

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