2026 Supreme(Online)(NCLT) 2369

NATIONAL COMPANY LAW TRIBUNAL
Brajendra Mani Tripathi, Member (J), Man Mohan Gupta, Member (T)
Bhaskar Prakashan Private Limited – Appellant
Versus
Devendra P. Jain – Respondent
IA/546(MP)2025 in TP 184 of 2019 [CP(IB) 113 of 2017]

A purchaser of a corporate debtor as a going concern in liquidation is entitled to a clean slate with past claims extinguished upon distribution under Section 53 of the IBC.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 32A, 60(5), 53, 238 - IBBI (Liquidation Process) Regulations, 2016 - Regulation 32(e), 32A - NCLT Rules, 2016 - Rule 11 - Companies Act, 2013 - Sections 66 - Application for reliefs by successful bidder of going concern sale in liquidation - Sale of corporate debtor as a going concern - Clean slate principle - Extinguishment of past claims and liabilities - Immunity under Section 32A. (Paras 1, 14, 16, 18)

(B) The Adjudicating Authority has residual and facilitative jurisdiction under Section 60(5) of the Code. It does not extend to granting blanket statutory exemptions or overriding substantive provisions of other enactments, except to the limited extent recognised under Sections 32A and 238 of the Code and by binding judicial precedents. (Para 18)

(C) Upon distribution of sale proceeds under Section 53, all claims, demands, liabilities and dues of creditors, whether admitted or not, relating to the period prior to the transfer date, stand extinguished. No person or authority shall initiate or continue any proceedings in respect of such extinguished claims. (Paras 18, 22

(B))

Facts of the case:
The Corporate Debtor Sandhya Prakash Limited was ordered into liquidation by the NCLT, Indore Bench on 20.09.2019. The Liquidator published an auction notice on 17.01.2025 for sale of the Corporate Debtor as a going concern. The Applicant, Bhaskar Prakashan Private Limited, emerged as the successful bidder with a bid of Rs. 47,00,00,000/- and a Sale Certificate was issued on 28.02.2025. The entire sale consideration was distributed to stakeholders under Section 53 of the IBC. The Applicant filed this application seeking various reliefs and concessions to operate the Corporate Debtor as a going concern.

Issues: The main issues were the extent to which past liabilities, claims, and proceedings against the Corporate Debtor stand extinguished upon a going concern sale in liquidation, and whether the successful bidder is entitled to specific reliefs such as immunity from past taxes, termination of contracts, and extinguishment of encumbrances.

Findings of Court:
The court considered the undisputed facts and the consistent judicial view that a going concern sale in liquidation is akin to resolution, and the purchaser is entitled to a clean slate to achieve the object of value maximization and revival. The court approved the sale, extinguished past claims upon distribution under Section 53, granted protection under Section 32A, and ordered the release of encumbrances. However, blanket exemptions under specific statutes like Income Tax Act or GST laws were not granted, leaving them to the respective authorities.

Ratio Decidendi: The court ruled that when a corporate debtor is sold as a going concern in liquidation, after distribution of sale proceeds under Section 53 of the IBC, all past claims and liabilities are extinguished, enabling the purchaser to start on a clean slate. The Adjudicating Authority has the power to grant consequential reliefs to ensure the effective revival of the corporate debtor as a going concern.

Result: Application allowed and disposed of with detailed directions.

Table of Content
1. sale of corporate debtor as a going concern requires consequential reliefs. (Para 1 , 2 , 4)
2. judicial precedents establish clean slate principle for going concern sales. (Para 5 , 6 , 7 , 8 , 9 , 10)
3. applicant seeks specific reliefs for going concern operation. (Para 11)
4. liquidator has no objection to reliefs sought by applicant. (Para 12)
5. court finds legal basis for granting reliefs per judicial precedents. (Para 13 , 14 , 15 , 16 , 17 , 18)
6. court grants specific reliefs with conditions for going concern sale. (Para 19 , 20 , 21 , 22)
7. application allowed and disposed with directions. (Para 23 , 24)

ORDER

Delivered on 23.04.2026

1. The present Interlocutory Application has been filed by M/s. Bhaskar Prakashan Private Limited (hereinafter referred to as 'Applicant') under Section 60(5)(c) a/w Section 32A of the Insolvency and Bankruptcy Code, 2016 read with Regulation 32(e) of the IBBI (Liquidation Process) Regulations, 2016 read with Rule 11 of the NCLT Rules, 2016, seeking certain reliefs and concessions from this Hon'ble Adjudicating Authority as the Corporate Debtor M/s. Sandhya Prakash Limited is sold as a going concern in liquidation.

2. The brief facts and circumstances leading to the filing of the present Application are as follows:

(a) This Hon'ble Adjudicating Authority vide its order dated 20.09.2019 passed a Liquidation Order against the Corporate Debtor M/s. Sandhya Prakash Limited and thereby appointed Mr. Devendra P. Jain as the Liquidator of the Corporate Debtor. Copy of Liquidation Order dated

20.09.2019 is annexed hereto and marked as Annexure-A.

(b) On 17.01.2025, the Liquidator published an Auction Notice for the e-

auction of the Corporate Debtor, scheduling the e-auction to be conducted on 14.02.2025. Copy of the e-auction public announcement dated 17.01.2025 is attached and marked as Annexure-B. The options given under the notice were as follows:

Option A: Sale of Corporate Debtor as a Going Concern under Regulation 32(e) read with Regulation 32A of the Regulations — Reserve Price: Rs. 47,00,00,000/-; EMD: Rs. 4,70,00,000/-. Specific Exclusion: Cash and Cash Equivalents, other bank balances.

Option B: Sale of assets of the Corporate Debtor.

(c) The Applicant participated in the e-auction conducted on 14.02.2025 and made a bid of Rs. 47,00,00,000/- (Rupees Forty Seven Crores Only) for the Corporate Debtor under Option A (Sale as Going Concern) and was declared as the Successful Bidder. The payment details made by the Successful Bidder are as follows:

(d) The entire payment was received by the Liquidator and the Sale Certificate was issued on 28.02.2025 as per the terms and conditions prescribed. Copy of Sale Certificate issued on 28.02.2025 is attached and marked as Annexure-C. The Sale Certificate was issued on 'As Is Where Is Basis', 'As Is What Is Basis', 'Whatever There Is Basis' and 'Without Recourse Basis'.

(e) The entire sale consideration amount of Rs. 47,00,00,000/- (Rupees Forty Seven Crores Only) has been received by the Liquidator and has been distributed to the stakeholders in accordance with Section 53 of the IBC, 2016.

A. PLEADINGS OF THE APPLICANT:

3. The Applicant submits that Regulation 32 of the IBBI (Liquidation Process)

Regulations, 2016 provides for sale of the Corporate Debtor as a going concern. Among the first instances of selling a company under liquidation as a going concern under the Code was witnessed in the matter of Gujarat NRE Coke Limited (Company Petition No. 182/2017) before the Hon'ble NCLT, Kolkata Bench, wherein the Court observed that the Corporate Debtor is a going concern and directed the Liquidator to attempt to sell the Corporate Debtor as a 'going concern' through a slump sale, observing that a slump sale is nothing more than the transfer of the whole or part of a business concern as a going concern. This judgment set the wheels of the amendments in motion and thereafter Regulation 32(e) and 32A of the IBBI (Liquidation Process) Regulations, 2016

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