Voluntary liquidation permits replacement of the liquidator by resolution without Adjudicating Authority approval, and a status quo order cannot override it.

In voluntary liquidation under the Insolvency and Bankruptcy Code and the Voluntary Liquidation Process Regulations, the corporate person may appoint or replace the liquidator by the prescribed resolution process, and prior approval of the Adjudicating Authority is not required. The Tribunal distinguished this regime from liquidation following CIRP and held that, where the Board resolution and shareholder ratification had already effected replacement, a status quo direction continuing the earlier liquidator was beyond jurisdiction and could not stand. The replacement was therefore effective.

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Issues: (i) Whether, in a voluntary liquidation under the Insolvency and Bankruptcy Code, 2016 and the Voluntary Liquidation Process Regulations, 2017, the Corporate Debtor could replace the liquidator by resolution without requiring approval of the Adjudicating Authority, and whether the status quo direction continuing the earlier liquidator could stand.

Analysis: Section 59 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 5 of the IBBI (Voluntary Liquidation Process) Regulations, 2017 permits the corporate person to appoint a liquidator and, wherever required, replace him by another insolvency professional through a resolution passed in the manner prescribed. The Tribunal held that this regime is distinct from liquidation following CIRP, and that no prior approval of the Adjudicating Authority is required for appointment or replacement of a liquidator in voluntary liquidation. On the facts, the Board resolution and subsequent shareholder ratification had already replaced the earlier liquidator before the status quo order was passed.

Conclusion: The status quo direction was beyond jurisdiction and was vacated. The replacement of the liquidator was held to be effective.

Final Conclusion: The appeal challenging the continuance of the earlier liquidator succeeded, while the connected appeal was disposed of with a direction to the Adjudicating Authority to first examine maintainability and then decide the removal application on merits.

Ratio Decidendi: In voluntary liquidation, the corporate person may replace the liquidator by the prescribed resolution process, and the Adjudicating Authority has no jurisdiction to insist on continuance of the earlier liquidator by a status quo order where the replacement has been validly completed.

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