Appointment and Role of the Liquidator under the IBC
The Insolvency and Bankruptcy Code (IBC), 2016, provides a structured framework for the resolution of insolvency and bankruptcy. A crucial figure in this process, particularly during liquidation, is the Liquidator. This module delves into how a liquidator is appointed and the multifaceted roles they undertake to wind up the affairs of a corporate debtor.
Appointment of the Liquidator
The appointment of a liquidator is a critical step that signifies the commencement of the liquidation process. This appointment is typically made by the Adjudicating Authority (AA), which is the National Company Law Tribunal (NCLT) for corporate insolvencies.
The Adjudicating Authority (NCLT).
Role and Responsibilities of the Liquidator
The liquidator's role is central to the orderly winding up of a company. They act as a trustee for the stakeholders, managing the assets and liabilities to maximize value and distribute proceeds according to the waterfall mechanism.
The 'waterfall mechanism' under Section 53 of the IBC dictates the order in which secured creditors, workmen's dues, operational creditors, and other stakeholders are paid from the sale of assets. This ensures a fair distribution.
| Aspect | Resolution Professional (CIRP) | Liquidator (Liquidation) |
|---|---|---|
| Primary Objective | To facilitate resolution and keep the company as a going concern | To realize assets and distribute proceeds to creditors |
| Focus | Restructuring debt, finding a buyer, or reviving operations | Selling assets, winding down operations, and settling claims |
| Outcome | Successful resolution plan or liquidation | Dissolution of the corporate debtor |
Key Powers and Duties
The IBC grants significant powers to the liquidator to effectively carry out their duties. These powers are balanced by strict accountability to the Adjudicating Authority and the IBBI.
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The liquidator's role is dynamic and requires a blend of legal acumen, financial expertise, and managerial skills to navigate the complex process of winding up a company.
Learning Resources
The official bare act of the IBC, providing the complete legal text for understanding the provisions related to liquidation and the liquidator's role.
Access to all relevant regulations, notifications, and circulars issued by the IBBI governing the liquidation process and the conduct of liquidators.
Search and review orders passed by the National Company Law Tribunal, which often detail the appointment and directives for liquidators.
An article explaining the appointment, powers, and duties of a liquidator under the IBC from a legal perspective.
A detailed guide covering the entire liquidation process, including the appointment and functions of the liquidator.
A practical guide published by the Institute of Chartered Accountants of India (ICAI) that covers various aspects of IBC, including liquidation.
A video explaining the fundamental role and responsibilities of a liquidator in winding up proceedings under Indian law.
An educational video that breaks down the liquidation process under the IBC, highlighting the liquidator's involvement.
An academic article providing an in-depth analysis of the liquidation process and the legal framework governing liquidators.
The official website of the IBBI, the regulatory body for insolvency professionals and the IBC, offering a wealth of information and resources.