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2026 Supreme(Online)(NCLT) 369
NATIONAL COMPANY LAW TRIBUNAL
Anil Raj Chellan, Member (Technical), K. R. Saji Kumar, Member (Judicial)
Rashmi Cement Limited – Appellant
Versus
Sanjay Vijay Jeswani – Respondent
C.P (IB) No.153/(MB-IV)/2022|C.P (IB) No.153/MB/2022
For the Liquidator:Sanjay Jeswani|For the Respondent/ Liquidator: Gaurav Jalendra
Sale of corporate debtor as going concern in liquidation distinct from resolution plan; no clean slate or extinguishment of past liabilities beyond auction terms; limited reliefs like capital restructuring granted, others rejected.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5), 31(1), 53, 32A - IBBI (Liquidation Process) Regulations, 2016 - Regulations 32(e), 32A - Sale of corporate debtor as going concern in liquidation - Successful bidder sought reliefs akin to resolution plan including clean slate, extinguishment of past claims, capital restructuring, waivers from Companies Act procedures, continuation of licenses, tax exemptions, and merger sanction - Held: Sale as going concern distinct from resolution plan; lacks multi-stakeholder scrutiny and CoC approval; cannot confer same reliefs to prevent circumvention of CIRP - Process documents binding ('as is where is' basis); no clean slate for liabilities like taxes, utilities unless specified - Granted: Capital restructuring (cancellation of existing shares, fresh issuance, waiver of Companies Act procedures); board reconstitution; handover of assets/documents; Liquidator cooperation; immunity under Section 32A - Rejected: Clean slate for past claims/litigations, tax waivers, license continuations without re-application, merger, change of registered office, utility connections - Bidder at liberty to approach authorities for denied reliefs. (Paras 14-36)
(B) Companies Act, 2013 - Sections 42, 62(1)(c), 66 - Dispensations for capital reduction, share issuance incidental to going concern sale granted; other procedural compliances not waived. (Para 19)
(C) NCLT Jurisdiction - Section 60(5) - Limited to matters arising from liquidation; cannot extend to general business difficulties or override other statutes. (Paras 25, 26, 34)
Facts of the case:
Corporate debtor underwent CIRP (commenced 28.04.2023), failed, ordered liquidated (09.12.2024). Sold as going concern via e-auction (10.03.2025) for INR 5.25 crores to applicant; sale certificate issued (01.04.2025). Applicant filed under Section 60(5) seeking extensive reliefs/concessions for revival.
Findings of Court:
Application partly allowed as tabulated; specific reliefs granted for capital restructuring, board change, asset handover; others rejected with liberty to approach authorities.
Issues: Whether going concern sale in liquidation entitled to resolution plan-like clean slate, extinguishment of past liabilities, waivers from other laws; scope of NCLT jurisdiction over ancillary reliefs.
Ratio Decidendi: Going concern sale is mere transfer, not restructuring; bound by auction terms; no automatic extinguishment of unspecified liabilities; limited dispensations only for matters incidental to sale; NCLT cannot exceed IBC powers or override process documents.
Result: Application partly allowed; disposed of without costs. (Para 36)
| Table of Content |
|---|
| 1. cirp failed, liquidation initiated, rashmi cement successful bidder. (Para 1 , 2 , 3 , 4) |
| 2. applicant seeks clean slate reliefs akin to resolution plan. (Para 5 , 6 , 7 , 8 , 9) |
| 3. liquidation sale distinct from resolution process, no equivalent reliefs. (Para 11 , 12 , 13 , 14 , 15 , 16) |
| 4. e-auction terms govern liability waiver per shantech precedent. (Para 17) |
| 5. capital restructuring allowed incidental to going concern sale. (Para 19) |
| 6. no clean slate; claims processed under section 53. (Para 20) |
| 7. board reconstitution permitted post-ownership change. (Para 21) |
| 8. handover of assets per as-is-where-is terms. (Para 24) |
| 9. licenses require authority approach, no nclt dispensation. (Para 25) |
| 10. tax waivers beyond nclt jurisdiction. (Para 26) |
| 11. merger scheme requires companies act compliance. (Para 27) |
| 12. section 32a immunity conditional on management change. (Para 33) |
| 13. application partly allowed per tabulated findings. (Para 34 , 35 , 36) |
ORDER
Per: Anil Raj Chellan, Member (Technical)
1. The present Application has been filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (Code) read with Rule 11 of the National Company Law Tribunal Rules, 2016 (NCLT Rules), by Rashmi Cement Limited, the successful bidder in the auction conducted by the liquidator of Yatin Steel India Private Limited, (Corporate Debtor). The Applicant, being the purchaser of the Corporate Debtor, seeks certain reliefs, concessions, and exceptions with respect to the Corporate Debtor.
Facts in Brief
2. The Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor commenced pursuant to the order passed by this Tribunal on 28.04.2023 in an application filed by Maruti Strips and Ferro Alloys Private Limited (Operational Creditor) under Section 9 of the Code. The Resolution Plans that were received during CIRP were not approved by the Committee of Creditors (CoC). Following this, during a meeting held on 07.10.2024, the CoC unanimously passed a resolution with 100% voting in favour of liquidation of the Corporate Debtor.
3. The Tribunal vide order dated 09.12.2024 in I.A. No. 63 of 2024, appointed Mr. Sanjay Vijay Jeswani, the Respondent, as Liquidator of the Corporate Debtor. Subsequently, on 13.02.2025, the Liquidator published the e-auction Notice for the sale of the Corporate Debtor on a going concern basis (E-Auction Notice) along with a process memorandum to invite bids for the e-auction from prospective bidders (Process Memorandum) under Regulation 32(e) and 32A of the IBBI (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations). The E-Auction Notice and Process Memorandum delineate two distinct categories of bids as given below:
4. The Applicant submitted an Expression of Interest along with an Earnest Money Deposit (EMD) of Rs. 52,50,000/-, with the Liquidator on 25.02.2025. The Applicant subsequently participated in the said E-Auction Process conducted by the Liquidator on 10.03.2025, and submitted a bid for Rs. 5,25,00,000/- (inclusive of the EMD Amount). Following this, the Liquidator declared the Applicant as the successful bidder and issued a Letter of Intent (LOI) on 15.03.2025. The Applicant made full payment of the bid amount within the stipulated time on 21.03.2025. Subsequently, the Liquidator also issued a Sale Certificate dated 01.04.2025 in favour of the Applicant for the acquisition of the Corporate Debtor as a going concern with the right to recoveries under litigation.
Submissions of the Applicant
5. The Applicant submits that the Corporate Debtor was unable to fulfil its financial, operational, and other liabilities on a regular basis and therefore was subjected to a failed CIRP. The Corporate Debtor was then admitted to liquidation and therefore continues to suffer from its inability to discharge its financial, operational, and other liabilities. Such liabilities now stand as the Liquidation Claims of the Corporate Debtor, which will be dealt with from the consideration amount rec
