Case Note & Summary
The appeal arose from an order dated 17.06.2026 passed by the National Company Law Tribunal (NCLT), Ahmedabad, rejecting the application of the appellant, State Bank of India, who was the successful auction purchaser of the corporate debtor. The core issue was whether the NCLT could revisit its earlier liquidation order dated 10.10.2025 while considering the reliefs sought by the appellant. The appellant argued that the NCLT's decision was based on an erroneous application of the IBBI (Liquidation Process) (Second Amendment) Regulations, 2025, which could not retrospectively invalidate a liquidation process that had already commenced. The respondents supported this argument, asserting that the auction process was a continuation of the liquidation process initiated on 10.10.2025. The court noted that prior to the amendment, the regulations allowed the Committee of Creditors to recommend the sale of the corporate debtor as a going concern. The NCLT's liquidation order explicitly recognized this recommendation and was effective from the date of the order. The court emphasized that the auction process was not a new liquidation but a step in the existing process. The court found that the NCLT had erred in treating the amendment as retrospectively applicable, which jeopardized the sale and the rights of the creditors. The court ultimately held that the liquidation by sale as a going concern commenced on 10.10.2025 and remanded the matter back to the NCLT for examination of the reliefs to be granted to the successful auction purchaser within two weeks. The appeals were disposed of with these directions.
Headnote
A) Insolvency Law - Liquidation Process - Validity of Sale as Going Concern - Insolvency and Bankruptcy Code, 2016, Section 33(2) - The court held that the liquidation process commenced on the date of the liquidation order, and subsequent amendments could not retrospectively alter the legal foundation of the process already initiated. The decision of the Committee of Creditors to explore sale as a going concern was integral to the liquidation order (Paras 1-20).
Issue of Consideration
Whether the Adjudicating Authority could revisit its earlier liquidation order while considering consequential reliefs.
Final Decision
The court held that the liquidation by sale as a going concern commenced on 10.10.2025, and the Impugned Order was set aside for incorrectly interpreting the retrospective application of the amendment. The matter was remanded to the NCLT for examination of reliefs to be granted to the successful auction purchaser.
Law Points
- Liquidation process
- going concern sale
- retrospective application of regulations
- Committee of Creditors' decision
- Insolvency and Bankruptcy Code
- 2016
