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1. ISSUES:
1.1. Whether initiation of liquidation proceedings under Section 33(1)(a) of the Insolvency and Bankruptcy Code, 2016 (I&B Code) can be challenged on grounds of non-receipt of communication regarding the initiation of Corporate Insolvency Resolution Process (CIRP).
1.2. Whether liquidation can be ordered during the pendency of SARFAESI proceedings and while a civil appeal against CIRP initiation is pending before the Supreme Court.
1.3. Whether the Committee of Creditors' (CoC) commercial wisdom in rejecting resolution plans and deciding liquidation can be judicially interfered with.
1.4. Whether failure to submit upfront payment as part of a One Time Settlement (OTS) proposal affects the consideration of such proposal during CIRP.
1.5. Whether the order of liquidation suffers from any legal vices or perversity warranting interference by the Appellate Tribunal.
2. RULINGS / HOLDINGS:
2.1. The initiation of liquidation proceedings under Section 33(1)(a) of the I&B Code was proper despite the appellant's claim of non-receipt of communication, as the order initiating CIRP had attained finality following dismissal of the civil appeal by the Supreme Court.
2.2. The pendency of SARFAESI proceedings and civil appeal did not preclude the initiation of liquidation proceedings once the CIRP process was concluded and resolution plans were rejected.
2.3. The CoC's decision to reject resolution plans and resolve for liquidation by a 96.50% majority, including representatives of home buyers, was based on its "commercial wisdom" and is not subject to judicial interference.
2.4. The OTS proposal submitted by the appellant failed to mature as the appellant did not deposit the required 25% upfront payment, thus it was not considered by the CoC.
2.5. There was no demonstrated legal infirmity or perversity in the liquidation order; subsequent developments, including completion of asset distribution and payments to home buyers, rendered the appeal meritless and liable to be dismissed.
3. RATIONALE:
3.1. The Court applied the statutory framework of the Insolvency and Bankruptcy Code, 2016, particularly Sections 7, 33(1)(a), and the provisions governing CIRP and liquidation.
3.2. The principle that the order initiating CIRP attains finality once the Supreme Court dismisses the appeal was emphasized, precluding re-litigation of the same grounds in liquidation proceedings.
3.3. The Court recognized the binding effect of the CoC's commercial wisdom under the I&B Code, which cannot be questioned unless there is manifest perversity or illegality.
3.4. The requirement of upfront payment as a condition to consider OTS proposals was upheld as a legitimate procedural safeguard to establish bonafides.
3.5. The judgment did not record any dissent or doctrinal shift but reaffirmed established principles that liquidation orders following rejection of resolution plans and finality of CIRP initiation are not ordinarily subject to interference.
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