Section 33 of IBC : Section 33: Initiation Of Liquidation

Explanation using Example

Imagine a company, XYZ Pvt. Ltd., is undergoing a corporate insolvency resolution process (CIRP). The CIRP has been in process for 180 days, which is the maximum period allowed for the resolution under the Insolvency and Bankruptcy Code (IBC), 2016.

Scenario 1: No Resolution Plan Received

The resolution professional handling the case of XYZ Pvt. Ltd. has failed to receive any resolution plan from potential resolution applicants within the stipulated 180 days. Consequently, the Adjudicating Authority (National Company Law Tribunal) exercises its power under Section 33(1)(a) of the IBC and orders the liquidation of XYZ Pvt. Ltd. The Authority also makes a public announcement that XYZ Pvt. Ltd. is under liquidation and informs the Registrar of Companies about the liquidation order.

Scenario 2: Rejection of Resolution Plan

Alternatively, let's say a resolution plan was submitted for XYZ Pvt. Ltd., but it did not comply with the necessary requirements. The Adjudicating Authority ...

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