Clean Slate Principle Shields Going Concern Buyer from Pre-Sale Dues: NCLAT Delhi Rules in Favour of Liquidator and Successful Bidder

Case Overview

Case Name: Anuj Bajpai Vs Inderdeep Construction Company & Anr. (NCLAT Delhi)
Appeal Number: Comp. App. (AT) (Ins) No. 1698 of 2024 & I.A. No. 6123 of 2024
Date of Order: 13/02/2025
Forum: National Company Law Appellate Tribunal, New Delhi

Background and Context

Two separate but interlinked appeals came before the NCLAT Delhi, both arising out of a common order passed by the NCLT Ahmedabad Bench on 04.07.2024. The subject matter concerned the liquidation sale of M/s Anwesha Engineering & Projects Ltd. as a going concern. The first appeal was preferred by the Liquidator, Anuj Bajpai, who was aggrieved by certain adverse remarks recorded against him in paragraph 21 of the NCLT's order. The second appeal was filed by the successful auction bidder, Inderdeep Construction Company, whose application for certain waivers and concessions had been rejected by the NCLT.

The insolvency proceedings against Anwesha Engineering & Projects Ltd. were initiated when M/s Continental Piling and Excavation Pvt. Ltd. moved an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The application was admitted on 25.01.2021, with Mr. Sachin Bhattbhatt appointed as the Interim Resolution Professional. Subsequently, Anuj Bajpai was appointed as the Resolution Professional vide order dated 20.04.2021.

Committee of Creditors and Resolution Attempts

The Committee of Creditors (CoC) comprised three financial creditors:

• State Bank of India — 98.58% voting share
• Axis Bank — 4.21% voting share
• Aditya Birla Finance Ltd. — 5.21% voting share

Following publication of Form G on 20.04.2021, only one resolution plan was received from Kalpataru Power Transmission Ltd. However, the plan was conditional in nature and the resolution applicant declined to modify it even after being given an opportunity to do so. Fresh expressions of interest were invited and a second Form G was published on 29.10.2021. Three plans were subsequently received, but none secured the requisite majority vote in the 16th CoC meeting. The CoC ultimately resolved by 100% majority to proceed with liquidation and sale of the Corporate Debtor as a going concern, in accordance with Regulation 32 of the IBBI (Liquidation Process) Regulations, 2016.

The Regulatory Framework: Regulation 32A(4) and Its Amendment

Pre-Amendment Position

At the time the CoC voted for liquidation, the applicable provision was the unamended Regulation 32A(4) of the IBBI (Liquidation Process) Regulations, 2016, which read as follows:

"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."

Under this pre-amendment framework, the going concern sale had to be completed within 90 days of the liquidation commencement date, failing which the Liquidator was required to shift to individual asset-based sale modes.

The Critical Amendment of 16.09.2022

The Liquidator filed an application for liquidation of the Corporate Debtor under Section 33 of the IBC on 15.04.2022 (I.A. No. 373 of 2022). While this application was still pending, Regulation 32A(4) was amended on 16.09.2022 vide Notification No. IBBI/2022-23/GN/REG094. The amended provision dispensed with the 90-day time limit and instead required that the going concern sale under Regulation 32(e) be attempted exclusively at the first auction.

The liquidation order was eventually passed on 13.01.2023 — that is, after the amendment had already come into force. This sequence of dates became central to the NCLAT's analysis:

Chronology of Liquidation Sale Process

Following the liquidation order of 13.01.2023, the Liquidator constituted a Stakeholders Consultation Committee (SCC) with the following composition:

• State Bank of India — 90.58% share
• Axis Bank — 4.21% share
• Aditya Birla Finance Ltd. — 5.21% share