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2025 Supreme(Online)(NCLT) 5091
NATIONAL COMPANY LAW TRIBUNAL
Bidisha Banerjee, Siddharth Mishra, JJ
Central Bank of India – Appellant
Versus
Sasa Musa Sugar Works Private Limited – Respondent
Company Petition (IB) No. 157/KB/2021
For Liquidator: Ms. Shreya Choudhary, Adv.
For EPFO: Ms. Rashmi Bothra, Adv., Ms. Anjali Kedia, Adv.
Judicial compliance periods in liquidation processes are excluded from timelines to prevent penalization of liquidators for delays beyond their control.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - The liquidator seeks exclusion of 61 days from the liquidation period due to compliance with judicial orders and stakeholder meetings - It is determined that such exclusion is necessary to protect the integrity of the liquidation process and ensure it is not adversely affected - Guidelines on timelines in the Liquidation Regulations allow for judicially mandated exclusions. (Paras 4.1 to 5.5)
(B) Liquidation Regulations - Regulations 33 and 47 - These regulations guide the sales process of assets of the corporate debtor, with provisions for deviations due to judicial compliance.
Facts of the case:
The liquidator, appointed on 20.02.2025, sought exclusion of a period spent on compliance with a judicial order and subsequent stakeholder meetings from the liquidation process.
Findings of Court:
Exclusion of 61 days is justified and protects the liquidator from delays not of his own making, whilst adhering to the objective of value maximization in liquidation.
Issues: The court considered whether delays caused by compliance with judicial requirements can be legally excluded from the liquidation timeline.
Ratio Decidendi: Judicial compliance periods are recognized for exclusion to prevent penalization of the liquidator, as it preserves the objective of maximizing value through liquidation.
Result: The application stands disposed of accordingly.
ORDER
Per: Bidisha Banerjee, Member (Judicial)
1. This Court congregated through a hybrid mode.
2. Heard the Learned Counsels for both parties.
3. The instant application being I.A. (IB) No. 1322/KB/2025, has been preferred by a Mr. Manish Jain, Liquidator of Sasa Musa Sugar Works Private Limited under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 , for brevity “I&B Code” seeking the following reliefs:
a. Allow this application.
b. Exclude 61 days from 1st May, 2025 (the date when the order was passed by the Hon’ble National Company Law Appellant Tribunal) till 30th June, 2025 (the date of the 6th SCC meeting when the SCC Members authorized the Liquidator to publish further e-auction notice for the Corporate Debtor as a going concern)
c. Pass such other or further orders as may be deemed fit and proper in the facts and circumstances of the case.
4. Submission of the Applicant:
4.1 It is submitted that the liquidation of the Corporate Debtor commenced on 20.02.2025 by order of this Adjudicating Authority and the Applicant was appointed as Liquidator under Section 34 (1) of the IBC. Upon taking charge, the Applicant secured the assets and assessed that a sale of the Corporate Debtor as a going concern would maximise value.
4.2 It is claimed that in furtherance thereof, the 2nd SCC Meeting (29.03.2025) resolved to attempt a going-concern sale with a reserve price of ₹125 crores, inclusive of the FD component of ₹9.5 crores. An e-auction was conducted on 03.05.2025, which failed for want of bids.
4.3 It is further contended that in the meantime, by order dated 01.05.2025, the Hon’ble NCLAT permitted the suspended directors to place a Scheme of Compromise/Arrangement under Section 230 of the Companies Act, 2013 before the Liquidator. In compliance, the scheme was placed in the 4th SCC Meeting (26.05.2025); clarifications were sought, and time was granted to submit a revised scheme.
4.4 It is submitted that a revised scheme dated 03.06.2025 was considered in the 5th SCC Meeting (09.06.2025). The scheme was rejected by the SCC and the stakeholders on the grounds of lack of investor details, absence of credible source of funds, and a long repayment timeline of 36 months, which was not in the interest of creditors who could realise value sooner through an auction.
4.5 It is submitted that, thereafter, the Applicant approached this Bench by filing I.A. (IB) No. 993/KB/2025 seeking permission to conduct up to three subsequent e-auctions for sale as a going concern without block-wise asset segmentation. This Adjudicating Authority , by order dated 24.06.2025, was pleased to allow the prayer.
4.6 It is further submitted that the SCC in its 6th Meeting (30.06.2025) authorised the Liquidator to issue further e-auction notices pursuant to the said order. Subsequently, in the 7th SCC Meeting (28.07.2025), it was unanimously resolved that the period 01.05.2025 to 30.06.2025 consumed entirely in compliance with judicial directions, consideration of the Section 230 scheme, SCC approvals, and obtaining leave from this Adjudicating Authority, all of which were beyond the control of the Liquidator be excluded.
4.7 It is submitted that the exclusion of 61 days is necessary to protect the integrity of the liquidation process and to prevent any adverse inference of delay against the Liquidator when such time was spent strictly on account of judicial and stakeholder- mandated processes.
5. Analysis and Findings
5.1 We have considered the pleadings and the documents. We discern that the period 01.05.2025 to 30.06.2025 was consumed in judicial compliance pursuant to the Hon’ble NCLAT order dated 01.05.2025, consideration of the scheme under Section 230 , convening of SCC meetings on 26.05.2025 and 09.06.2025, rejection of the revised scheme, and thereafter moving this Bench in I.A. (IB) No. 993/KB/2025 which was allowed on 24.06.2025, followed by SCC authorisation on 30.06.2025. The Liquidator was not at liberty to publish fresh auction notices until leave w
