Liquidation must yield to revival efforts first; compromise or arrangement under the Companies Act should be explored before asset sale.

In liquidation proceedings, the tribunal declined to interfere with the order excluding only 100 days from the claimed 129 days in the liquidation timeline, noting that the relevant period had already been accounted for and that no ground existed to disturb the exclusion granted by the Adjudicating Authority. It also reiterated that liquidation is a last resort and that, before any sale of assets in liquidation, the liquidator must first attempt revival through a compromise or arrangement under Sections 230 to 232 of the Companies Act, 2013; only if that effort fails may sale of assets proceed, preferably as a going concern, under the insolvency framework.

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Issues: (i) whether the appellate tribunal should interfere with the order excluding only 100 days out of the claimed 129 days in the liquidation timeline; (ii) whether, before sale of assets in liquidation, the liquidator must first explore revival through the procedure under Sections 230 to 232 of the Companies Act, 2013.

Issue (i): whether the appellate tribunal should interfere with the order excluding only 100 days out of the claimed 129 days in the liquidation timeline.

Analysis: The exclusion issue was examined in the context of the liquidation proceedings and the computation of time spent in pending proceedings before the tribunal and the Supreme Court. The tribunal accepted that the relevant period had already been taken into account and found no ground to disturb the impugned order granting exclusion only to the extent allowed by the Adjudicating Authority.

Conclusion: The challenge to the exclusion of time was rejected and the impugned order was not interfered with.

Issue (ii): whether, before sale of assets in liquidation, the liquidator must first explore revival through the procedure under Sections 230 to 232 of the Companies Act, 2013.

Analysis: The tribunal relied on the settled approach that liquidation is a last resort and that the object of the insolvency regime is revival and continuation of the corporate debtor. It reiterated that, in liquidation, the liquidator must first attempt a compromise or arrangement under Section 230 of the Companies Act, 2013, and only on failure of revival may the assets be sold, preferably as a going concern, in accordance with the Insolvency and Bankruptcy Code, 2016.

Conclusion: The liquidator was directed to proceed first under Sections 230 to 232 of the Companies Act, 2013 before any sale of assets in liquidation.

Final Conclusion: The appeal ended without interference in the time-exclusion order, while the liquidator was required to attempt revival through the compromise-or-arrangement mechanism before resorting to sale of assets in liquidation.

Ratio Decidendi: In liquidation under the insolvency regime, revival of the corporate debtor through a compromise or arrangement must be explored before sale of assets, and liquidation remains a last resort unless such revival effort fails.

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