Commercial wisdom in liquidation decisions will be left undisturbed absent illegality, especially after assets are sold and transferred.

Liquidation ordered on the commercial wisdom of the committee of creditors was not interfered with because no illegality or perversity in the decision-making process was shown. The liquidation process had substantially progressed to completion, with assets sold and possession delivered to the auction purchaser, and an application for closure of liquidation and dissolution already pending. In those circumstances, appellate interference would unsettle completed steps and affect third-party rights that had arisen, so the challenge to the liquidation order was not sustainable.

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Issues: Whether the order directing liquidation of the corporate debtor under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 called for interference, particularly when the committee of creditors had resolved to liquidate and the liquidation process had substantially been completed.

Analysis: The resolution to liquidate had emanated from the commercial decision of the committee of creditors, and no illegality or perversity in the decision-making process was shown. The liquidation process had progressed to completion, the assets had been sold, possession had been delivered to the auction purchaser, and an application for closure of liquidation and dissolution was already pending. In these circumstances, interference with the liquidation order would unsettle completed steps and affect third-party interests that had come into existence.

Conclusion: The challenge to the liquidation order was not sustainable and the appeal was liable to be dismissed.

Ratio Decidendi: A liquidation order passed on the commercial wisdom of the committee of creditors will not be interfered with absent illegality or perversity, and once liquidation has substantially culminated in sale and transfer of assets, the appellate forum should decline interference where third-party rights have arisen.

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