Going-concern liquidation sale upheld where stakeholders approved revisions and later challenge failed under Regulation 32A.

A going-concern sale in liquidation was not treated as invalid under Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016 where the liquidation had begun before the provision was inserted and the stakeholders' committee had unanimously approved the sale and reserve-price revisions. The applicant, having participated in the consultative process and acquiesced in the adopted course, could not later object because the sale was completed after the ninety-day period. The amendment and IBBI circular did not require cancellation of the sale on these facts, particularly after repeated failed auctions justified a lower reserve price and the sale preserved value for the estate.

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Issues: Whether the sale of the corporate debtor as a going concern was contrary to Regulation 32A of the IBBI (Liquidation Process) Regulations, 2016 and liable to be set aside.

Analysis: The liquidation commenced before Regulation 32A was inserted, and the stakeholders' committee, in which the applicant participated, unanimously approved sale of the corporate debtor as a going concern and accepted the reserve-price revisions. The Tribunal held that the applicant, having acquiesced in the course adopted and having remained part of the consultative process, could not later challenge the sale merely because it was completed after the ninety-day period. It further held that the amendment and the IBBI circular did not compel cancellation of a going-concern sale in the facts of the case, especially where repeated failed auctions justified reduction of the reserve price and the sale ultimately secured value for the estate.

Conclusion: The sale as a going concern was not held to be illegal or violative of Regulation 32A, and the challenge to set aside the sale failed.

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