Locus standi in liquidation sale appeals denied where a non-participant had no substantial interest in the going-concern sale process.

An appellant who was neither a stakeholder in the liquidation nor a participant in the sale process was found to lack locus standi and substantial interest to seek leave to appeal against approval of sale of the corporate debtor as a going concern. The Tribunal noted that the liquidator's sale application was made under Section 60(5) of the Insolvency and Bankruptcy Code read with Regulation 32A(e), that the appellant had not objected in time, sought impleadment, or participated in the Swiss Challenge process despite notice, and that no bid was made when offers were considered. It also held that an appeal under Section 61 of the Insolvency and Bankruptcy Code is confined to statutory grounds, while reliance on Section 421 of the Companies Act was misplaced. The sale proceeds had already been paid and distributed under Section 53.

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Issues: Whether the appellant, who was not a stakeholder in the liquidation process and had not participated in the sale process, had locus standi and sufficient cause to seek leave to appeal against the order permitting sale of the corporate debtor as a going concern.

Analysis: The Tribunal noted that the liquidator's application for sale as a going concern was moved under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 32A(e) of the liquidation regulations, and that the successful bidder alone was a party to the sale proceedings. It found that the appellant had not objected in time, had not sought impleadment, had not participated in the Swiss Challenge process despite notice, and had made no offer when bids were considered. The Tribunal further held that an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 is confined to the statutory grounds and that reliance on Section 421 of the Companies Act, 2013 was misplaced. It also accepted that the sale consideration had been paid and distributed in accordance with Section 53 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The appellant was held to have no locus standi or substantial interest to seek leave, and the application for leave to appeal was rejected.

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