Going-concern liquidation sale upheld where auction terms allowed court approval, post-approval payment, and later offers did not unsettle completion.

Where the liquidation sale documents expressly allowed the liquidator to seek Adjudicating Authority approval, a going-concern sale of the corporate debtor was upheld because the auction terms contemplated post-approval transfer and payment, the successful bidder paid within the stipulated period, and the later reserve-price reduction and belated higher offer did not undermine the completed process. The challenge based on alleged non-compliance with the liquidation timeline therefore failed. Refusal to appoint an independent forensic auditor was also sustained because the assets had already been valued, the sale notice issued, and the auction concluded, leaving no sufficient basis for such relief at the instance of the appellant.

---

---

Issues: (i) whether the liquidator could seek approval of the Adjudicating Authority for sale of the corporate debtor as a going concern and whether the auction sale was liable to be cancelled for alleged non-compliance with the liquidation timeline; (ii) whether the rejection of the request for appointment of an independent forensic auditor was justified.

Issue (i): whether the liquidator could seek approval of the Adjudicating Authority for sale of the corporate debtor as a going concern and whether the auction sale was liable to be cancelled for alleged non-compliance with the liquidation timeline.

Analysis: The sale process document expressly contemplated that where approval of the Adjudicating Authority was required, the liquidator could move a suitable application and the sale would remain subject to such approval. The auction terms also provided that, for acquisition of the company as a going concern, the transfer date would occur within 90 days of approval by the Adjudicating Authority and the balance consideration would be payable within 30 days of demand, with delayed payment attracting interest. Regulation 33 of the liquidation regulations and Schedule I did not prohibit such approval when incorporated into the sale terms. The successful bidder deposited the balance amount shortly after approval, and the reserve price reduction in the second auction was held to be permissible. The belated higher offer and the appellant's settlement proposal did not invalidate the completed auction process.

Conclusion: The approval process and the completed auction sale were valid, and no ground was made out to set aside the sale.

Issue (ii): whether the rejection of the request for appointment of an independent forensic auditor was justified.

Analysis: The assets had already been valued, the sale notice issued, and the auction concluded with a successful bidder identified. In that setting, there was no sufficient basis to direct a forensic audit merely at the instance of the appellant, especially when the grievance did not displace the completed liquidation process.

Conclusion: The refusal to appoint an independent forensic auditor was upheld.

Final Conclusion: The impugned order approving the sale of the corporate debtor as a going concern and declining forensic audit relief was sustained, and the appeal failed in its entirety.

Ratio Decidendi: Where the liquidation sale documents validly contemplate approval of the Adjudicating Authority, the auction is conducted accordingly, and the successful bidder pays within the stipulated post-approval period, the sale cannot be invalidated on a claimed absence of prior approval or on a belated higher offer; a forensic audit is not warranted merely after a completed and valued auction process.

---