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Issues: Whether the liquidation process suffered from violations of the Liquidation Process Regulations, 2016 in the manner of sale, reduction of reserve price, and change in sale methodology, so as to justify interference with the auction and the impugned rejection of reliefs sought by the appellant.
Analysis: The appeal was examined in the context of repeated unsuccessful auctions, multiple OTS proposals offered at markedly low values, and the liquidation framework permitting sale of assets in different modes, including as a going concern, in slump sale, or in parcels. The reserve price reductions were found to be aligned with the staged reductions contemplated in Schedule I to Regulation 33 of the Liquidation Process Regulations, 2016. Once the mode of sale changed from going concern sale to slump sale, the subsequent auction process was treated as a fresh application of the sale mechanism. The record also showed approval of the stakeholder consultation committee, appointment of registered valuers, and realization in the final auction of an amount exceeding the reserve price and sufficient to meet creditor claims and leave a surplus for shareholders. The plea that the shareholder could itself sell the assets at fair value during liquidation was held to be unsupported by the IBC framework, and the allegations of regulatory breach were rejected.
Conclusion: No violation of the liquidation regulations was established, and the challenge to the liquidation auction and related reliefs failed.
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