Enhanced bid in liquidation accepted to maximise value, with sale proceeds to be distributed under the statutory waterfall.

Where a liquidation sale of the corporate debtor as a going concern had not resulted in a concluded purchaser after the successful bidder withdrew, an enhanced offer could be accepted to maximise asset value and further the object of the Insolvency and Bankruptcy Code, 2016. The liquidator was directed to proceed with sale in favour of the applicants on the terms fixed by the order, and distribution of the proceeds was required to follow the statutory waterfall under Section 53 of the Code.

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Issues: Whether the earlier auction sale of the corporate debtor should be displaced in favour of the applicants' enhanced offer and the liquidator directed to accept that offer.

Analysis: The liquidation process had been initiated for sale of the corporate debtor as a going concern under Regulation 32(c) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. After the successful bidder withdrew, no concluded purchaser remained. The applicants then offered a higher consideration, and the Court found that acceptance of the enhanced bid would further the object of the Insolvency and Bankruptcy Code, 2016 by maximising the value of the assets. It was also clarified that distribution of sale proceeds would have to follow the statutory waterfall under Section 53 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The enhanced bid was accepted, and the liquidator was directed to proceed with sale of the corporate debtor to the applicants on the terms fixed by the order.

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