The clean slate principle applies in liquidation sales, ensuring that purchasers are not burdened with past liabilities not disclosed during the insolvency process.

JUDGMENT

Per: Justice Rakesh Kumar Jain:

This order shall dispose of two appeals bearing CA (AT) (Ins) No. 1698 of 2024 filed by the Liquidator (hereinafter referred to as ’first appeal’) and CA (AT) (Ins) No. 1518 of 2024 filed by the Successful Bidder (hereinafter referred to as ’second appeal’) against the common order dated 04.07.2024 passed by the National Company Law Tribunal, Ahmedabad Bench by which an application bearing I.A No. 1479 of 2023 filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (in short ’Code) by the Successful Bidder for seeking certain reliefs and concessions, has been dismissed.

2. The Liquidator has filed the appeal because of the observations made against him in para 21 of the impugned order.

3. The brief facts of this case are that M/s Continental Piling and Excavation Pvt. Ltd. filed an application under Section 9 of the Code r/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s Anwesha Engineering & Projects Ltd. bearing CP (IB) No. 20/9/NCLT/AHM/2020 before the Tribunal which was admitted on 25.01.2021 and Mr. Sachin Bhattbhatt was appointed as the IRP, however, Anuj Bajpai was further appointed as the RP by the order dated 20.04.2021.

4. The erstwhile IRP constituted the CoC comprising of financial creditors, namely, State Bank of India with 98.58% voting share, Axis Bank with 4.21 % voting share and Aditya Birla Finance Ltd. with 5.21% voting share.

5. Pursuant to the publication of Form G on 20.04.2021, only one plan was received from Kalpataru Power Transmission Ltd. but the said plan was found to be conditional in nature and despite giving an opportunity, the said resolution applicant did not modify its clauses. It led to the invitation of fresh expression of interest and another form G was published on 29.10.2021 pursuant to which three resolution plans were received but all the three plans failed as they did not receive requisite majority when they were put to vote in the 16th meeting of the CoC rather the CoC voted for the liquidation and sale of the CD as a going concern by 100% majority as per Regulation 32 of the IBBI (Liquidation Process) Regulations, 2016 (in short ’Regulations’). At the relevant time, Regulation 32A(4) of the Regulations required the sale of the CD as a going concern only within the first 90 days from the date of liquidation of the CD. Regulation 32A(4) of the Regulations is as under “if the liquidator is unable to sell the CD or its business under clause (e) or (f) of regulation 32 within 90 days from the liquidation commencement date, he shall proceed to sell the assets of the CD under clause (a) to (d) of Regulation 32. Regulation 32 deals with sale of assets etc. which required that the liquidator may sell (a) an asset on a standalone basis (b) the assets in a slump sale (c) a set of assets collectively (d) the assets in parcels”.

6. The liquidator preferred an application for liquidation of the CD under Section 33 of the Code on 15.04.2022 bearing I.A No. 373 of 2022. While, the said application was pending, an amendment was brought in Regulation 32A(4) on 16.09.2022 as per which the time limit of 90 days for conducting the sale of the CD as a going concern was amended and it was provided that as per 32A(4) liquidator may sell the assets of the CD under clause (e) of Regulation 32 exclusively only at the first auction whereas Regulation 32A (e) provides that the liquidator may sell the business (s) of the CD as a going concern.

7. I.A No. 373 of 2022 was allowed vide order dated 13.01.2023, after which the liquidator constituted the Stakeholders Consultation Committee（SCC) as per the Regulations wherein the State Bank of India had 90.58 % share, Axis Bank had 4.21 % share and Aditya Birla Finance Ltd. had 5.21% share.

8. The Appellant/Liquidator circulated the draft e-auction process document vide mail and at the time when the liquidation order dated 13.01.2023 was passed, there were no pending c