Going-concern sale in liquidation permitted where stakeholder approval and value maximisation support the proposal.

Under the Insolvency and Bankruptcy Code and the Liquidation Process Regulations, the Tribunal considered whether a liquidation-stage amendment could permit sale of the corporate debtor as a going concern. It accepted the proposal because the secured financial creditor had given in-principle approval, there were no employee or worker claims, and the sale was aimed at preserving the business and maximising stakeholder value. The amendment application was allowed and permission was granted for a going-concern sale. The Tribunal also found an extension of the liquidation timeline appropriate, since liquidation steps were still pending while the sale proposal was pursued, and extended the liquidation period by six months.

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Issues: (i) Whether the amendment application seeking modification of the prayers in the proceeding should be allowed and the corporate debtor could be sold as a going concern under the liquidation framework; (ii) Whether the liquidation period should be extended.

Issue (i): Whether the amendment application seeking modification of the prayers in the proceeding should be allowed and the corporate debtor could be sold as a going concern under the liquidation framework.

Analysis: The relief was examined in the context of the liquidator's powers under the Insolvency and Bankruptcy Code, 2016 and the Liquidation Process Regulations, 2016. The proposal had the in-principle approval of the secured financial creditor, there were no employee or worker claims, and the proposed sale was aimed at preserving the business as a going concern and maximising value for stakeholders. The proposal was therefore considered consistent with the liquidation regime and the framework permitting sale of the corporate debtor as a going concern.

Conclusion: The amendment application was allowed and permission was granted to sell the corporate debtor as a going concern to the respondent.

Issue (ii): Whether the liquidation period should be extended.

Analysis: The liquidation process had remained pending while the proposal for sale was being pursued. In view of the approved revival proposal and the need to complete liquidation-related steps, an extension of the liquidation period was considered appropriate, though not for the full period sought.

Conclusion: The liquidation period was extended for six months.

Final Conclusion: The liquidation proceedings were permitted to continue on the basis of a going-concern sale, and the liquidation timeline was extended to enable completion of the process.

Ratio Decidendi: Where a going-concern sale of the corporate debtor has stakeholder approval and serves value maximisation in liquidation, the Tribunal may permit such sale and extend the liquidation period to facilitate completion of the process.

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