NCLT Allows Reliefs to Successful Bidder in Going Concern Sale of Company Under Liquidation

The National Company Law Tribunal (NCLT), Ahmedabad Bench, has granted reliefs and concessions to the successful bidder that acquired a corporate debtor as a going concern during liquidation, observing that such reliefs are necessary to ensure effective revival and continued operation of the company. The bench of Chitra Hankare (Judicial Member) and Dr. V. G. Venkata Chalapathy (Technical Member) while deciding an application filed by Arrhum Tradelink Private Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with the IBBI (Liquidation Process) Regulations and Rule 11 of the NCLT Rules. The insolvency proceedings began when Bank of Baroda initiated the Corporate Insolvency Resolution Process (CIRP) against Vimal Oil and Foods Limited by filing a petition under Section 7 of the Insolvency and Bankruptcy Code. The NCLT admitted the petition on 19 December 2017. However, no resolution plan was approved by the Committee of Creditors. Consequently, the tribunal ordered liquidation of the corporate debtor on 19 December 2019 under Section 33 of the Code. Following the liquidation order, the liquidator issued a sale notice on 2 November 2020 to sell the corporate debtor as a going concern through an e-auction, which was conducted on 1 December 2020. Arrhum Tradelink Pvt. Ltd. emerged as the successful bidder and subsequently paid the entire sale consideration by 3 March 2021. Despite the successful auction, the bidder had earlier approached the tribunal seeking various reliefs and concessions required for operating the company as a going concern. However, the NCLT dismissed that application on 7 October 2024 and also set aside the sale of the corporate debtor. Aggrieved by this decision, the applicant and the liquidator approached the National Company Law Appellate Tribunal(NCLAT). The appellate tribunal initially stayed the NCLT order and later, in its judgment dated 17 April 2025, set aside the earlier decision and permitted the applicant to file a fresh application before the NCLT seeking the required reliefs. Arrhum Tradelink contended that merely purchasing a corporate debtor as a going concern under the liquidation framework is not sufficient to revive the business. It argued that certain regulatory relaxations, approvals, and concessions are essential for effective revival and continued functioning of the company. The applicant submitted that in the absence of such reliefs, the very objective behind selling a company as a going concern—namely revival of business and value maximisation of assets—would be defeated. The liquidator of the corporate debtor supported the application and informed the tribunal that the successful bidder had paid the entire consideration for the auction sale. The liquidator also indicated that he had no objection to the reliefs sought by the applicant. During the proceedings, the National Stock Exchange of India Limited raised certain objections. It submitted that the corporate debtor continued to remain listed during liquidation and that invoices had been issued for annual listing fees for the financial years 2020-21 and 2021-22. According to the exchange, the fees were not paid either by the liquidator or the applicant. Further, continued non-compliance with regulatory requirements under the listing regulations prompted the exchange to initiate delisting-related actions. After examining the submissions of the parties and the background of the insolvency process, the NCLT considered the necessity of granting appropriate reliefs to ensure that the purchaser can effectively revive and operate the corporate debtor as a going concern. The tribunal noted that the going concern sale mechanism under the Insolvency and Bankruptcy Code is intended to preserve business value and maintain continuity of operations, and therefore the successful bidder may require certain operational and regulatory concessions. Case Details Case Title: Arrhum Tradelink Pvt Ltd. Versus Shri Manoj Khattar Liquidator of Vimal Oil & Foods Limited Citation: JURISHOUR-384-NCLT-2026(AHEM) Case No.: IA/685(AHM)2025 in CP(IB) 135 of 2017 Date: 13/03/2026 Counsel For Petitioner: Adit Sanjanwala, Advocate Counsel For Respondent: Nipun Singhvi, Adv. Click Here To Read Order Read More: Evidence Obtained During Illegal Search Is Not Automatically Inadmissible – Know The SC Judgement

NCLT Allows Reliefs to Successful Bidder in Going Concern Sale of Company Under Liquidation

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