Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 1012

NATIONAL COMPANY LAW TRIBUNAL
ANIL RAJ CHELLAN, Technical Member, K. R. SAJI KUMAR, Judicial Member
Mr. Ravikumar Gaurishankar Patel – Appellant
Versus
Mr. Gajesh Labhchand Jain – Respondent
C.P.(IB) No. 1056/MB/2020

Advocates:
For the Appellants/Petitioners: Adv. Nausher Kohli, Adv. Yahya Batatawala
For the Respondents: None Present

The court affirmed that the NCLT's jurisdiction is confined to statutory provisions of the IBC, limiting the scope for granting broader reliefs in the liquidation process.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5) and 32A - Liquidation process - Application filed for reliefs and concessions regarding the sale of corporate debtor as a going concern - Sale concluded for Rs. 15 Crores with the issuance of Sale Certificate by Liquidator - Aimed at preserving employment and maximizing stakeholder returns. (Paras 1, 2.1, 4.2)

(B) Legal principles - Jurisdiction of NCLT under Section 60(5)(c) to entertain matters arising from insolvency - Limitations observed in granting of general reliefs outside statutory provisions of the Code. (Paras 5.5, 12.4)

Facts of the case:
The applicant acquired the corporate debtor through an auction process initiated post-failure of the Corporate Insolvency Resolution Process. Liquidator appointed and sale certificate issued affirming the transfer of ownership. (Paras 1, 2.1, 2.4)

Findings of Court:
Sale of corporate debtor as a going concern recognized under regulations, with past liabilities extinguished subject to specific conditions. Reliefs could not extend beyond the provisions of the Code without justifiable cause. (Paras 4.1, 10.3)

Issues: Whether the applicant is entitled to broader reliefs outside the confines of the IBC provisions post-acquisition and the implications of extinguishing past liabilities. (Paras 5.3, 10.1)

Ratio Decidendi: The court held that while the intent was to facilitate a going concern sale, the jurisdiction of NCLT must remain bound by specific provisions of the IBC, restricting arbitrary reliefs and emphasizing compliance with applicable laws unilaterally. (Paras 5.5, 12.3)

Result: Application partly allowed with specific reliefs granted and others denied, emphasizing adherence to statutory limitations.

Per: Anil Raj Chellan, Member (Technical)

1. This Interlocutory Application bearing IA (I.B.C) No.840/MB/2025 was filed on 13.02.2025 by Mr. Ravikumar Gaurishankar Patel (Applicant / Successful Bidder) under Section 60 (5) read with Section 32A of the Insolvency and Bankruptcy Code, 2016 (Code) and Regulation 32(e) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (Liquidation Process Regulations). The Applicant has acquired Talwalkars Better Value Fitness Limited (Corporate Debtor) as a going concern in the liquidation process for a consideration of Rs. 15,00,00,000 (Fifteen Crore Rupees). The Liquidator of the Corporate Debtor issued a Sale Certificate dated 23.01.2025 to the Applicant, evidencing such acquisition. The Applicant seeks directions from this Tribunal for the grant of the Reliefs and Concessions mentioned in Annexure-G of the present Application.

2. Submissions of Applicant

2.1. The Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor was initiated on 11.01.2021 on an application filed by a financial creditor, viz., Axis Bank Limited, under Section 7 of the Code.

C.P. (IB) No. 1056/MB/2020 _________________________________________________________________________________

Upon failure of the CIRP, an order for liquidation of the Corporate Debtor was passed on 28.04.2022 in I.A. No. 272 of 2022, and Mr. Gajesh Labhchand Jain, i.e., the Respondent herein, was appointed as the Liquidator of the Corporate Debtor.

2.2. The Applicant submits that following the appointment as the Liquidator of the Corporate Debtor company, he issued the E-auction Sale Notice dated 15.07.2024 for sale of the Corporate Debtor as a going concern in consonance with Regulations 32(e) and 33(2) of the Liquidation Process Regulations and the Process Memorandum dated 15.07.2024 (Process Document) specifying the applicable terms and conditions for participation in the auction process and governing the other aspects thereof.

2.3. In response to the aforementioned Sale Notice, the Applicant submitted its Expression of Interest along with all relevant documents detailing the eligibility of the potential bidder, accompanied by the Earnest Money Deposit (EMD) of Rs. 80,00,000/- in accordance with the Process Document. Subsequently, the Applicant participated in the E-auction held on 16.08.2024, during which the Applicant was declared as the Successful Bidder with a bid price of Rs. 15,00,00,000/-. Accordingly, the Liquidator issued a Letter of Intent (LoI) dated 17.08.2024 to the Applicant.

2.4 The Applicant submits that in accordance with the Process Document and LoI, the balance consideration of Rs. 14,20,00,000/- was remitted on 07.11.2024 along with interest of Rs. 24,27,616/-. Following the payment of the entire sale consideration, a Sale Certificate dated 23.01.2025 was issued in favour of the Applicant. This certificate confirms the receipt of the entire sale consideration and declares the Applicant as the Successful Auction Purchaser of the Corporate Debtor as a going concern.

C.P. (IB) No. 1056/MB/2020 _________________________________________________________________________________ 2.5 The Applicant, having been declared as the Successful Bidder for the Corporate Debtor, seeks certain reliefs and concessions from this Adjudicating Authority in connection with the acquisition of the Corporate Debtor as a going concern. It is submitted that in order to transfer of the ownership of the Corporate Debtor and revitalisation of the business of the Corporate Debtor, it is imperative to grant certain additional reliefs, concessions and permissions that are essential for the business of the Corporate Debtor as a going concern. Consequently, it is contended that the instant case is a fit case to grant the reliefs, as prayed for in the Application.

2.6 The Applicants rely upon the rulings of Hon’ble NCLAT in Shiv Shakti Inter Globe Exports Pvt. Ltd. v. KTC Foods Pvt. Ltd. through Liquidator Mr. A