Liquidation & Bankruptcy Practice

Welcome to Liquidation & Bankruptcy Practice. We will study Grounds for a Liquidation Order under Section 33, work through an example, and practise using the course's learning material. Liquidation and bankruptcy practice training. Sign in and use the study header to open your authorised course. Select this published lesson. Start Course Tutor with Auto audio on: it teaches continuously, answers a typed question, then resumes. Door three — CoC decision to liquidate. Under Section 33(2), where the resolution professional, at any time during the CIRP but before confirmation of the resolution plan, intimates to the Tribunal the decision of the CoC, approved by the required voting share, to liquidate the corporate debtor, the Tribunal must pass a liquidation order. Scenario A. Kaveri Textiles Ltd. was admitted into CIRP. The CoC received two resolution plans, and both were found to fail Section 30(2) because they provided nothing for dissenting financial creditors. Before the resolution period expired, the CoC met and, with the required voting share, resolved to liquidate. The promoter argues before the Tribunal that the company is viable and a third investor is "in talks". Reasoning. The operative door is Section 33(2). The resolution professional has intimated a CoC decision taken before confirmation of any plan. The Tribunal's role is to see that the decision was taken by the required voting share at a validly convened meeting. The promoter's viability argument goes to commercial wisdom, which the Tribunal does not reassess (K. Sashidhar). Advice: the liquidation order will follow; the promoter may, after liquidation, explore a Section 230 scheme or bid in a going-concern sale if not ineligible under Section 29A. Which mistake would change the reasoning in this example? 1. Treating liquidation as a creditor's first remedy. Correction: under the Code, a creditor applies for CIRP; liquidation follows only through a Section 33 door. 2. Asking the Tribunal to review the CoC's commercial decision to liquidate. Ask Course Tutor: please explain this step from the example. Reasoning. The operative door is Section 33(2). The resolution professional has intimated a CoC decision taken before confirmation of any plan. Why does it follow? Add what you tried, so the explanation addresses your difficulty. Now try the source practice. Can the Tribunal refuse a liquidation order because it believes the company is still viable after the CoC has validly resolved to liquidate? Pause before the answer. The source answer is: No. Under Section 33(2) the order is mandatory once a valid CoC decision is intimated; the commercial decision is not reviewed on merits. Explain the key idea in your own words, revisit any mistaken step, then continue to the next lesson. Use Stop to end Course Tutor when you finish.