Liquidation after Failure of CIRP

The National Company Law Tribunal ordered liquidation of Shri Tradco Deesan Private Limited under Section 33(1) of the Insolvency and Bankruptcy Code, 2016 after the Corporate Insolvency Resolution Process (“CIRP”) failed to yield an approved resolution plan within the statutory and extended timelines. 

The Tribunal observed that despite multiple extensions of CIRP over a prolonged period exceeding 741 days, the Committee of Creditors (“CoC”) could neither approve a resolution plan nor approve further extension of the CIRP period. 

In the absence of an approved resolution plan under Section 30(6) of the Code, the Adjudicating Authority held that liquidation became an inevitable statutory consequence under Section 33 of the IBC. 

The order highlights the strict statutory architecture of the IBC where continuation of CIRP beyond permissible timelines cannot be indefinitely sustained merely because negotiations or voting processes remain incomplete.