2026 (3) TMI 1083 - AT - IBC

Infructuous appeals where liquidation closed after sale as going concern; appeals dismissed for lack of practical efficacy.

The article addresses whether appeals against an order directing liquidation and rejecting a resolution plan become infructuous after the liquidation is ... Closure of liquidation process on account of sale of the corporate debtor as a going concern and relieving the liquidator - extinguishment of existing shares - protection of purchaser from antecedent liabilities. Effect of a subsequent NCLT order closing liquidation following sale of the corporate debtor as a going concern on pending appeals against the liquidation order - HELD THAT:- The Tribunal recorded that the Learned NCLT, by an order dated 03.12.2025, found that the liquidator had sold the corporate debtor as a going concern and ordered closure of the liquidation proceedings in terms of the applicable Regulations, relieved the liquidator and directed steps to reconstitute the company and update records. In view of that subsequent order, the impugned order directing commencement of liquidation no longer has practical significance. The Tribunal therefore dismissed the pending Company Appeals as having been rendered infructuous, while preserving the parties' rights to agitate any available remedies before appropriate fora in accordance with law. The appeals are dismissed as rendered infructuous because the liquidation proceedings have been closed following sale of the corporate debtor as a going concern; rights of the parties are left open. Final Conclusion: The appeals were dismissed as having been rendered infructuous in view of the NCLT order closing the liquidation after sale as a going concern; the decision is without prejudice to parties pursuing any other remedies available in law. Issues: Whether the Company Appeals challenging the NCLT order directing liquidation and rejecting consideration of the appellant's resolution plan have become infructuous by reason of a subsequent NCLT order closing the liquidation proceedings on account of sale of the corporate debtor as a going concern and relieving the liquidator.Analysis: The Appellate Tribunal considered the status of the liquidation process in light of the subsequent order passed by the NCLT on 03.12.2025 which records that the corporate debtor has been sold as a going concern, orders closure of liquidation proceedings under Regulation 45(3) of the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016, and relieves the liquidator. The appellate challenge to the order directing liquidation and to orders rejecting consideration of the resolution plan no longer has practical efficacy once the liquidation has been closed and the assets and corporate status have been dealt with pursuant to the sale as a going concern. The Tribunal therefore treated the appeals as having lost their practical purpose.Conclusion: The appeals are dismissed as having been rendered infructuous, without prejudice to any rights parties may have to agitate their claims before an appropriate forum in accordance with law.