Publication: Handbook on Liquidation Process and Voluntary Liquidation Process under The Insolvency and Bankruptcy Code, 2016 by CIBC of ICAI –

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Published In : February 2022
Committee/Department : Committee on Insolvency & Bankruptcy Code
E-mail : cibc@icai.in
Website : http://www.icai.org
Price : ₹ 200/-
ISBN No. : 978-
Published by : The Publication & CDS Directorate on behalf of
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi – 110 002 (India)

The primary objective of the Insolvency and Bankruptcy Code, 2016 is to resolve
the insolvency of corporate debtor and prevent it from going into liquidation
process. However, in certain circumstances the liquidation process is
unavoidable. In that scenario, the Code and the Regulations thereunder provide
for the process of liquidation to enable orderly exit. There are times when the
corporate person would like to voluntarily liquidate itself and if it has not
committed any default it can apply for voluntary liquidation process under IBC.


The Liquidation process and Voluntary Liquidation process are performed by the
Liquidators appointed under the Code. The Powers and Duties of the Liquidator
are enumerated in the Code and accordingly the Liquidator so appointed has
been given the responsibility to comply with various Reporting requirements
under the Code. Further, for the benefit of the stakeholders, Model timeline of
liquidation process of a Corporate Debtor from the Liquidation Commencement
Date is also provided in the Code.
I appreciate the Committee on Insolvency & Bankruptcy Code of ICAI in taking
the initiative of bringing out the publication – Handbook on Liquidation Process
and Voluntary Liquidation Process under The Insolvency and Bankruptcy
Code, 2016 to help the professionals understand the relevant provisions relating
to Liquidation Process and Voluntary Liquidation Process under the Code and
also to know about the practical aspects based on case laws.


I commend the entire Committee and extend my sincere appreciation to CA.
Durgesh Kumar Kabra, Chairman, and CA. Prakash Sharma, Vice- Chairman,
Committee on Insolvency & Bankruptcy Code in bringing out this useful
publication.
I am sure that this publication would be helpful to the members, especially to
insolvency professionals and other stakeholders

As per the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority
may order for the liquidation of the corporate debtor in the following
circumstances: (i) where before the expiry of the Insolvency Resolution Process
period for completion of the corporate insolvency resolution process, no
Resolution Plan is received or (ii) if the Adjudicating Authority rejects the
Resolution Plan or (iii) If the resolution professional before the expiry of the
resolution process intimates the Adjudicating Authority, of the decision of the
Committee of Creditors that they have passed an order for the liquidation of
corporate debtor or (iv) where the Resolution Plan approved by the Adjudicating
Authority is contravened by the concerned corporate debtor, any person other
than the corporate debtor, whose interest is prejudicially affected by the
contravention, may make an application to the Adjudicating Authority to pass the
liquidation order.


In other words, where insolvency resolution of Corporate Debtor does not
succeed under Corporate Insolvency Resolution Process under the Code, it
leads to liquidation process. Again, under the Code, a corporate person who
intends to liquidate itself voluntarily and has not committed any default can
initiate voluntary liquidation proceedings. For both the liquidation process and
voluntary liquidation process, Liquidator is appointed, who plays a significant role
and performs various functions till the dissolution of the corporate debtor.
The Committee on Insolvency & Bankruptcy Code of ICAI as part of its initiative
to bring Handbooks on important topics under IBC has brought out this
publication – Handbook on Liquidation Process and Voluntary Liquidation
Process under The Insolvency and Bankruptcy Code, 2016 so as to help
members understand the provisions relating to Liquidation Process and
Voluntary Liquidation Process under the Code.


We would like to sincerely thank the President of ICAI, CA. Nihar N. Jambusaria
and Vice President of ICAI, CA. (Dr) Debashis Mitra for their encouragement and
support in bringing out this publication.
We would like to thank all the Committee Members for their guidance in bringing
out this publication