Debashis Nanda Liquidator Of Chamber ... vs Gokul Anil Kumar

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Comp. App. (AT) (Ins) No. 1297 of 2026 (Arising out of the Order dated 03.07.2026 passed by the National Company Law Tribunal, Mumbi Bench I, in IA No. 2697 (MB) of 2026 in C.P. (IB) No. 3962/MB/2018)

IN THE MATTER OF: Debashis Nanda Liquidator Of Chamber Constructions Private Limited Having Residence At C-304, Paradise Apartments, Plot No.40, IP Extension, New Delhi-110092 ...Appellant

Versus

1. Gokul Anil Kumar, the Suspended Director of the Corporate Debtor .... Intervenor

2. Stakeholders' Consultation Committee ...Respondent No. 1

Present For Appellant: Mr. Sumant Batra, Adv. along with Mr. Sarthak Bhandri, Ms. Ruja Kaur & Mr. Aditya Jain.

For Respondents: Mr. Abhishek Anand for Mr. Aniruth Purusothaman, Intervenor SBOD.

Mr. Karan Valecha & Ms. Shivangi Khandelwal, for Stakeholders' Consultation Committee (SCC). Comp. App. (AT) (Ins) No. 1297 of 2026

JUDGEMENT

(07.10.2026)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e., Debashis Nanda,

who is the Liquidator of Chamber Constructions Private Limited ("Corporate

Debtor"), herein, under Section 61 of the Insolvency and Bankruptcy Code, 2016

('Code') against the Order dated 03.07.2026 ("Impugned Order") passed by

the National Company Law Tribunal, Mumbai Bench-I ("Adjudicating

Authority") in I.A. (I.B.C.) No. 2697 (MB) of 2026 in C.P. (IB) No. 3962 (MB)

of 2018.

Stakeholders' Consultation Committee (SCC) is the Respondent No. 1

herein.

Gokul Anil Kumar, who is the Suspended Director of the Corporate Debtor,

is the Intervenor, herein.

2. The present Appeal arises from the Impugned Order, whereby the

application filed by the Appellant/Liquidator seeking extension of time and

appropriate directions for undertaking and completing the sale of the Corporate

Debtor as a going concern, pursuant to the liquidation order dated 21.02.2024,

came to be dismissed.

3. The controversy in the present Appeal essentially concerns the legal effect

of the Committee of Creditors' ('CoC') decision under Regulation 39C of the

CIRP Regulations, the subsequent liquidation order dated 21.02.2024 expressly

Page 2 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

directing the Liquidator to endeavour to sell the Corporate Debtor as a going

concern, the steps undertaken pursuant thereto, and the subsequent amendment to

the Liquidation Regulations notified on 14.10.2025.

4. The Appellant submitted that the issue arising in the present Appeal is not

res integra. The Appellant elaborated that significantly, when the present Appeal

came before this Appellate Tribunal on 23.07.2026, this Appellate Tribunal

expressly recorded that an "identical issue" was under consideration in Company

Appeal (AT) (Ins) Nos. 1138 of 2026 and 1145 of 2026 and directed that the

record of the present Appeal be placed before the Hon'ble Officiating Chairperson

so that all three appeals could be heard by one and the same Bench. The relevant

order dated 23.07.2026 records:

"an identical issue is under consideration before Bench No. I

in the CA (AT) (Ins) No. 1138 of 2026 and CA (AT) (Ins) No.

1145 of 2026."

The Appellant highlighted that the aforesaid observation is of particular

significance because the issue subsequently adjudicated in Company Appeal

(AT) (Ins) Nos. 1138 and 1145 of 2026, concerns the commencement of

liquidation by sale as a going concern and the applicability of the amendment

dated 14.10.2025.

5. The Appellant submitted that the said issue has since been considered and

decided by the coordinate bench of this Appellate Tribunal by its judgment dated

10.09.2026 in Company Appeal (AT) (Ins) Nos. 1138 and 1145 of 2026. The

Page 3 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

judgment examined, inter alia, whether a subsequent amendment dated

14.10.2025 could govern a liquidation process which had already commenced

pursuant to an earlier liquidation order under Section 33 of the Code, where the

CoC had already resolved to explore sale of the Corporate Debtor as a going

concern and such decision had been expressly noticed in the liquidation order.

6. The Appellant stated further that the ratio of the aforesaid judgment

directly bears upon the controversy in the present Appeal. In that matter, this

Appellate Tribunal held that where the CoC had resolved under Regulation 39C

to first explore sale of the Corporate Debtor as a going concern, and such decision

was placed before and recorded by the Adjudicating Authority while passing the

liquidation order, the subsequent steps undertaken by the Liquidator were steps

in implementation of an already existing liquidation order and CoC decision. The

Appellant submitted that this Appellate Tribunal specifically held that the auction

process could not be viewed in isolation from the liquidation order and that the

auction was not the commencement of liquidation but a subsequent step in the

liquidation process.

7. It is the case of the Appellant that the principle applies with equal, and in

the facts of the present case, direct relevance. In the present case, the CoC, in its

7th Meeting held on 31.08.2020, unanimously resolved with 100% voting share

to liquidate the Corporate Debtor and simultaneously recommended, in terms of

Regulation 39C, that upon commencement of liquidation, the Liquidator should

first explore sale of the Corporate Debtor as a going concern. The

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recommendation was therefore not an afterthought or an independent decision

subsequently taken during the liquidation process. It was a part of the liquidation

decision itself.

The Appellant elaborated that thus, the direction to explore sale of the

Corporate Debtor as a going concern was not merely an internal decision of the

CoC. It became an express part of the judicial liquidation order dated 21.02.2024.

8. The Appellant pleaded that this aspect assumes significance in view of the

subsequent judgment in Company Appeal (AT) (Ins) Nos. 1138 and 1145 of

2026. There also, this Appellate Tribunal treated the CoC's decision under

Regulation 39C, once noticed and accepted in the liquidation order, as forming

part of the liquidation process. It was held that with the Adjudicating Authority

taking on record the CoC decision to sell the Corporate Debtor as a going concern

and passing the liquidation order, the sale of the Corporate Debtor as a going

concern commenced with the liquidation order itself.

9. The Appellant urged that the present case is therefore required to be

examined in the context of the liquidation order dated 21.02.2024 and not by

artificially isolating the subsequent procedural steps undertaken by the Liquidator

as the liquidation order itself directed the Liquidator to endeavour to sell the

Corporate Debtor as a going concern. The subsequent constitution of the

Stakeholders' Consultation Committee ('SCC'), deliberations regarding assets

and liabilities, consideration of reserve price, marketing strategy, auction

Page 5 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

methodology and draft sale notice were all steps undertaken in furtherance of that

judicial direction.

10. The Appellant stated that the fact that an auction notice could not

ultimately be issued does not alter the character of the process already

commenced. The inability of the Appellant to proceed to the stage of issuance of

an auction notice was not attributable to any abandonment of the process or

failure to act on the part of the Liquidator. Rather, by order dated 28.05.2024 in

Company Appeal (AT) (Insolvency) No. 1047 of 2024, this Appellate Tribunal

specifically directed that, in the meantime, the Liquidator shall not issue any

auction notice. The Appellant was therefore judicially restrained from proceeding

further.

11. The Appellant submitted that a party cannot be prejudiced on account of

its compliance with an order of this Appellate Tribunal. The fact that the auction

notice was not issued during the period of restraint cannot, therefore, be treated

as evidence that the process of sale as a going concern had not commenced. The

process had already been set in motion pursuant to the liquidation order dated

21.02.2024, but further steps were rendered incapable of being undertaken by

operation of the interim judicial order. It is the case of the Appellant that this

aspect is also material because the Adjudicating Authority itself appears to have

recognised the effect of the judicial restraint by excluding the period during which

the Appellant was prevented from proceeding with the liquidation process.

Having acknowledged that the Appellant was restrained by an order of this

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Appellate Tribunal, the same period could not simultaneously be treated as a

period demonstrating that no process of sale as a going concern had commenced.

The Appellant stated that the subsequent dismissal of Company Appeal (AT)

(Insolvency) No. 1047 of 2024 on 11.05.2026 merely permitted the liquidation

proceedings to continue. It did not erase the liquidation order dated 21.02.2024,

the CoC's recommendation under Regulation 39C, or the steps already

undertaken pursuant thereto.

12. The Appellant elaborated that in the interregnum, the IBBI notified the

Insolvency and Bankruptcy Board of India (Liquidation Process) (Second

Amendment) Regulations, 2025 on 14.10.2025, whereby Regulation 32A was

omitted and clauses (e) and (f) of Regulation 32 were also omitted. The

subsequent amendment, however, cannot be applied so as to retrospectively

extinguish the legal effect of a liquidation process and judicial direction which

had originated substantially prior to the amendment.

13. The Appellant brought out to our notice that the judgment in Company

Appeal (AT) (Ins) Nos. 1138 and 1145 of 2026 also expressly relies upon the

principle that the Regulations applicable to a liquidation process are to be

examined as they stood on the date of the liquidation order. Referring to the

decision in Ashok Kumar Gulla v. State Bank of India & Ors., Company Appeal

(AT) (Ins) No. 786 of 2023, this Appellate Tribunal observed that while deciding

an issue arising in liquidation, the Regulations as they stood on the date when the

liquidation order was issued are required to be considered, and subsequent

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amendments cannot be applied so as to alter rights and obligations arising from

the liquidation process.

14. The Appellant requested this Appellate Tribunal to apply the aforesaid

principle, the rights and obligations arising from the liquidation order dated

21.02.2024 must necessarily be examined with reference to the statutory and

regulatory framework then governing the liquidation process. The Appellant had

acted pursuant to the CoC's decision under Regulation 39C and, more

importantly, pursuant to the express judicial direction requiring the Liquidator to

endeavour to sell the Corporate Debtor as a going concern.

15. The Appellant assailed the Impugned Order since, the Adjudicating

Authority, erred in treating finalisation of an Asset Sale Process Document or

issuance of an auction notice as the determinative point for commencement of

liquidation by sale as a going concern. It is the case of the Appellant that neither

the liquidation order dated 21.02.2024 nor the subsequent amendment can be read

as prescribing either of these events as the exclusive legal test for commencement.

16. The Appellant tried to impress up to that the approach adopted by the

Adjudicating Authority effectively compartmentalises the liquidation process

into isolated stages and treats the absence of an auction notice as conclusive,

while disregarding the preceding CoC decision, the liquidation order, the

constitution of the SCC and the deliberations undertaken pursuant to that order.

Such an approach overlooks the continuous chain of events commencing with the

Page 8 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

CoC's decision under Regulation 39C and culminating in the steps taken by the

Liquidator in implementation of the liquidation order.

17. It is further submitted that the subsequent amendment cannot be permitted

to render the express direction contained in the liquidation order dated 21.02.2024

otiose. The liquidation order constituted a judicial determination under Section

33 of the Code and expressly directed the Liquidator to endeavour to sell the

Corporate Debtor as a going concern. The Appellant acted upon the said direction

and undertook the process accordingly.

18. The Appellant submitted that the subsequent consideration by the SCC in

its 11th Meeting dated 26.05.2026 further demonstrates that the issue was treated

as continuation of the course of action originating from the liquidation order. The

SCC was apprised of the original direction for sale as a going concern, the steps

already undertaken, the effect of the judicial restraint and the subsequent

regulatory amendment, and thereafter resolved that the Liquidator should

approach the Adjudicating Authority for appropriate directions. Thus, the

application filed by the Appellant was consequently not an attempt to initiate an

altogether new mode of sale after 14.10.2025. It was an application seeking

continuation and completion of the course of action already contemplated by and

expressly directed under the liquidation order dated 21.02.2024.

19. Concluding arguments, the Appellants requested this Appellate Tribunal to

set aside the Impugned Order and allow this appeal.

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Comp. App. (AT) (Ins) No. 1297 of 2026

Findings

20. We note that by the Impugned Order, the Adjudicating Authority dismissed

the Liquidator's application seeking extension of time and permission to

undertake and complete the sale of the Corporate Debtor as a going concern,

holding that the process of such sale had not commenced before the Insolvency

and Bankruptcy Board of India (Liquidation Process) (Second Amendment)

Regulations, 2025 ("Amendment Regulations") came into force on 14.10.2025.

21. The facts material to the decision are largely undisputed, and are taken

from the record as placed before us. On an application under Section 7 of the

Code by a Financial Creditor, the Adjudicating Authority by order dated

16.07.2019 admitted the Corporate Debtor into the Corporate Insolvency

Resolution Process (CIRP). Separately, on an application by Bank of India, the

CIRP of the Principal Borrower was commenced by order dated 26.11.2019. The

appeal of the erstwhile management of the Principal Borrower (Company Appeal

(AT) (Ins) No. 1504 of 2019) was dismissed by this Appellate Tribunal on

07.02.2020, and a Review Application (R.A. No. 15 of 2020) against that order

was dismissed on 07.12.2020. The erstwhile management carried the matter to

the Hon'ble Supreme Court in Civil Appeal Nos. 827-828 of 2021, raising the

question whether simultaneous CIRPs against a principal borrower and a

corporate guarantor are maintainable. By order dated 12.04.2021, the Hon'ble

Page 10 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

Supreme Court directed the parties to maintain the status quo. The Civil Appeals

were ultimately dismissed on 26.02.2026.

22. In the context of the background of the case, we note that the Corporate

Debtor is the Corporate Guarantor of the liabilities of RNA Corp Private Limited

("Principal Borrower"). We further note that no viable and compliant resolution

plan was received in the CIRP of the Corporate Debtor. In its 7th meeting held

on 31.08.2020, the CoC resolved, with 100% voting share, to liquidate the

Corporate Debtor under Section 33(2) of the Code. By Resolution No. 5, adopted

with the same voting share and expressly in terms of Regulation 39C of the CIRP

Regulations, the CoC recommended that, upon an order of liquidation, the

Liquidator may first explore the sale of the Corporate Debtor as a going concern

under clause (e) of Regulation 32 of the IBBI (Liquidation Process) Regulations,

2016 ("Liquidation Regulations"), or the sale of its business as a going concern

under clause (f) thereof.

23. We note that on I.A. No. 2471 of 2020, the Adjudicating Authority by order

dated 21.02.2024 ("Liquidation Order") directed liquidation of the Corporate

Debtor under Section 33 of the Code and appointed the Appellant as Liquidator.

Giving effect to the CoC's recommendation, the Adjudicating Authority directed

in clause (f) of the operative part:

"The Liquidator shall endeavour to sale the Company as a

going concern during the liquidation in terms of Regulation

Page 11 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

32A of the Liquidation Process Regulations. In case he is not

able to do so within a period of 90 days from this date, he

shall proceed in accordance with clauses (a) to (d) of

Regulation 32 of the Liquidation Process Regulations."

24. It has been brought to our notice by the appellant. that pursuant to the

Liquidation Order, the Liquidator constituted the SCC and in its First Meeting on

01.03.2024, the CoC's recommendation for sale as a going concern was placed

before the SCC, and the assets and liabilities proposed to be included in the sale

were discussed. In the Second Meeting of SCC held on 09.05.2024, the

Liquidator placed before the SCC the proposed reserve price, marketing strategy,

auction process and the draft sale notice, which were deliberated upon.

25. We also take into consideration that before the auction notice could be

issued, the erstwhile management assailed the Liquidation Order in Company

Appeal (AT) (Insolvency) No. 1047 of 2024 and by order dated 28.05.2024, this

Appellate Tribunal, while issuing notice, directed that "in pursuance of the

impugned order, liquidator shall not issue any auction notice." This restraint

continued throughout the pendency of the appeal, which itself remained pending

in view of the status quo order of the Hon'ble Supreme Court in the matter of the

Principal Borrower. After the Civil Appeals were dismissed on 26.02.2026,

Company Appeal (AT) (Insolvency) No. 1047 of 2024 was heard on 09.03.2026

Page 12 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

and, by judgment dated 11.05.2026, the Appeal of Ex Management was

dismissed, permitting the liquidation to continue.

26. It is significant to note that in the meanwhile, on 14.10.2025, the

Amendment Regulations were notified, omitting Regulation 32A and clauses (e)

and (f) of Regulation 32 of the Liquidation Regulations, which governed sale as

a going concern. The omission was stated to apply where liquidation by sale as a

going concern has not commenced.

27. It is observed that after the dismissal of Company Appeal (AT)

(Insolvency) No. 1047 of 2024, the matter was placed before the SCC at its 11th

Meeting on 26.05.2026, where the SCC resolved that the Liquidator should

approach the Adjudicating Authority for directions and permission to carry the

going-concern sale to completion. The Liquidator accordingly filed I.A. No. 2697

(MB) of 2026 seeking extension of time and permission in terms of the

Liquidation Order. The Adjudicating Authority dismissed that application by the

Impugned Order.

28. We note that the Adjudicating Authority held that the process of sale of the

Corporate Debtor as a going concern had not commenced before the Amendment

Regulations came into force, as no auction notice had been issued and the Asset

Sale Process Document had not been finalised. The Impugned Order further held

that the steps taken by the Liquidator after the Liquidation Order, including the

deliberations of the SCC, did not amount to commencement of the sale process,

and therefore declined permission.

Page 13 of 26

Comp. App. (AT) (Ins) No. 1297 of 2026

We take into consideration that by a separate order in I.A. No. 2682 of

2026, the Adjudicating Authority excluded, from the period of liquidation, the

period during which the Liquidator remained restrained by judicial orders.

29. We note the arguments of the Appellant that the CoC's decision under

Regulation 39C was a commercial decision taken after every attempt at resolution

had failed, and that it stood incorporated into the Liquidation Order, which

thereby became a binding judicial mandate to first endeavour a going-concern

sale. According to the Appellant, liquidation by sale as a going concern

commenced with the Liquidation Order itself, the liquidation commencement

date under Section 5(17) of the Code being the date on which proceedings for

liquidation commence under Section 33 of the code.

30. It is noted that neither the Code, the Liquidation Regulations nor the

Amendment Regulations prescribe that such commencement occurs only on

issuance of an auction notice or finalisation of an Asset Sale Process Document.

It has been pleaded before us that the Adjudicating Authority, by so holding,

imported a requirement not found in the law and gave retrospective operation to

a prospective amendment. It was further submitted that the Liquidator constituted

the SCC immediately, placed the CoC's recommendation before it, and had the

reserve price, marketing strategy, auction process and draft sale notice deliberated

upon, and that the only reason the auction notice could not issue was the restraint

order of this Appellate Tribunal dated 28.05.2024.

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Comp. App. (AT) (Ins) No. 1297 of 2026

31. The Appellant urged that the Impugned Order is self-contradictory, having

excluded the period of judicial restraint from the liquidation period in I.A. No.

2682 of 2026, the Adjudicating Authority could not hold in the same breath that

the Liquidator had failed to commence the sale during that very period, and that

a party cannot be penalised for what an order of court rendered impossible.

Reliance was placed on the judgment of this Appellate Tribunal dated 10.09.2026

in Company Appeal (AT) (Ins) Nos. 1138 and 1145 of 2026 (State Bank of India

v. Garden Court Distilleries Pvt. Ltd.) ("Garden Court").

32. We would like to record that while reserving the order on 16 September

2026, Shri Abhiskek Anand appeared and submitted that he would be

representing Gokul Anil Kumar, the suspended director of the corporate debtor,

who has filed an intervention application. We allowed the intervention

application, since no objection was raised. by any parties except by the appellant,

who submitted that the intervenor is not having any interest in these proceedings.

However, this Appellate Tribunal permitted the intervenor to intervene and

provided him an opportunity to address us on the legal issues. We heard the

Intervenor who supported the impugned order and opposed the present appeal.

The intervenor further submitted that the impugned order records the correct

appreciation of the facts and law and does not require any interference by this

Appellate Tribunal.

33. On the other hand, the SCC fully supported the appeal.

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Comp. App. (AT) (Ins) No. 1297 of 2026

34. Based on the pleadings and submissions as noted above, we find that only

one issue needs to be determined and decided by us. The issue is, Whether, for

the purposes of the saving clause in the IBBI (Liquidation Process) (Second

Amendment) Regulations, 2025 (effective 14.10.2025), liquidation by sale of the

Corporate Debtor as a going concern had commenced on 21.02.2024, when the

Adjudicating Authority passed the Liquidation Order incorporating the CoC's

recommendation under Regulation 39C of the CIRP Regulations and directing

the Liquidator to endeavour a going-concern sale, or whether it commences only

upon issuance of an auction notice or finalisation of an Asset Sale Process

Document; and consequently whether the Impugned Order dated 03.07.2026 can

be sustained.

35. We take into consideration that Section 33(2) of the Code empowers the

CoC, at any time during the CIRP before confirmation of a resolution plan, to

decide by a vote of not less than sixty-six per cent of its voting share to liquidate

the corporate debtor. Section 5(17) of the Code defines the "liquidation

commencement date" as the date on which proceedings for liquidation commence

in accordance with Section 33 or Section 59 of the code, as the case may be.

Before the Amendment Regulations, Regulation 39C of the CIRP Regulations

provided that, while deciding to liquidate the corporate debtor under Section 33,

the CoC may recommend that the liquidator first explore the sale of the corporate

debtor as a going concern under clause (e) of Regulation 32 of the Liquidation

Regulations, or sale of the business as a going concern under clause (f) thereof.

Page 16 of 26

Comp. App. (AT) (Ins) No. 1297 of 2026

Where such a recommendation was made, the CoC was to identify and group the

assets and liabilities to be sold, and the resolution professional was required to

submit the recommendation to the Adjudicating Authority while filing the

decision of the CoC under Section 33 of the Code. The recommendation thus did

not remain a private resolution of the CoC; it was statutorily routed into the

liquidation proceeding before the Adjudicating Authority.

36. It is relevant to note that the Amendment Regulations, notified on

14.10.2025, omitted Regulation 32A and clauses (e) and (f) of Regulation 32. By

their own terms, the omission was not to affect cases in which liquidation by sale

as a going concern had already commenced. The entire controversy is thus

reduced to the construction of the expression "commenced" in that saving clause.

37. The coordinate bench of this Appellate Tribunal, in Garden Court (supra)

decided on 10.09.2026, was confronted with the very question raised here. There

the Adjudicating Authority, by order dated 10.10.2025, had admitted the

corporate debtor into liquidation under Section 33(2), recording the CoC's

Resolution under Regulation 39C and directing that the liquidation shall be

effective from the date of this order. The Amendment Regulations followed four

days later, on 14.10.2025, and the Adjudicating Authority, dealing with

consequential reliefs for the successful auction purchaser, held that sale as a going

concern had not commenced before the amendment. The coordinate bench of this

Appellate Tribunal set aside that Impugned order. The reasoning of the Appellate

Tribunal in Garden Court (supra) may be summarised that the CoC's decision

Page 17 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

under Regulation 39C was taken pursuant to a duty cast by the regulation, was

placed before the Adjudicating Authority, and formed part of the liquidation order

as contemplated by Section 33 read with Regulation 39C with the Adjudicating

Authority taking that decision on record and passing the liquidation order, the

sale of the corporate debtor as a going concern commenced on the date of the

liquidation order. The subsequent steps of the liquidator, including the auction,

were steps in implementation of an existing liquidation order and not the

commencement of a fresh process and applying Section 5(17), liquidation by sale

as a going concern commenced on the date of the liquidation order and in

determining rights and obligations arising from a liquidation, the Regulations

must be examined as they stood on the date of the liquidation order, as held in

Ashok Kumar Gulla v. State Bank of India, Company Appeal (AT) (Ins) No.

786 of 2023.

38. It is very pertinent and significant to note that the Garden Court (supra) is

a decision of a Bench of three Members of this Appellate Tribunal. Judicial

discipline and the need for certainty in the administration of insolvency law

require that a co-ordinate Bench follow it, unless it can be shown to be

distinguishable on facts or per incuriam. We are conscious, however, that a

decision is an authority for what it decides and not for what may logically be

deduced from it. We therefore examine, on first principles and on the facts of this

case, whether the ratio of Garden Court (supra) governs, before recording our

conclusion.

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Comp. App. (AT) (Ins) No. 1297 of 2026

39. We consider it useful to reproduce the operative passages of Garden Court

(supra) on which the Appellant relies, since it answers the question before us

directly. This Appellate Tribunal held there:

"...with Adjudicating Authority taking on record the decision of the Committee of Creditors under Regulation 39C to sell the Corporate Debtor as a going concern, and passing an order of liquidation; the sale of Corporate Debtor as a going concern commenced on the date when liquidation order was passed by the Adjudicating Authority."

"The auction was not the commencement of liquidation; rather, it constituted a subsequent step in the liquidation process, undertaken pursuant to the Committee of Creditors's decision and the express recognition thereof in the liquidation order."

In conclusion, it was held that liquidation by sale as a going concern

commenced on the date on which the Adjudicating Authority passed the

liquidation order in terms of Section 33 of the Code, relying on the definition in

Section 5(17). Those findings are not obiter; these findings are the ratio of the

decision, and formed the very basis on which, the order of the Adjudicating

Authority was set aside.

40. We are of the considered opinion that saving clause must be given its

natural meaning, and there is no need to add words to it. The expression that

determines the reach of the saving, here "commenced", is to be understood in the

context of the statutory scheme in which it appears. We are of the view that in the Page 19 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

present case where a rule of subordinate legislation is silent on retrospective

operation, the presumption is that it is prospective and that it does not take away

rights and obligations that have accrued or become crystallised under the law as

it stood. The principle finds statutory expression in Section 6 of the General

Clauses Act, 1897, in relation to the effect of repeal, which preserves rights,

privileges, obligations and liabilities accrued, and any proceeding commenced,

under the repealed provision. It needs to be appreciated that in a statute of the

nature of the Code, which is a beneficial and time-bound legislation, a saving

clause must be read so as to advance and not defeat its object, namely timely

resolution, maximisation of value of the Corporate Debtor and balancing of

stakeholder interests. A reading of "commenced" which confines the saving to

processes that had reached the stage of public advertisement would frustrate that

object.

41. The expression "liquidation by sale as a going concern" in the saving

clause does not describe a separate proceeding. It describes the mode in which a

liquidation is to be conducted. Liquidation itself commences on the liquidation

commencement date under Section 5(17), that is, when proceedings for

liquidation commence under Section 33. Once the liquidation order is passed, the

corporate debtor is in liquidation, the Liquidator is in office, and the mode of

realisation is to be governed by the order and the Regulations then in force. Where

that order itself directs that the going-concern route be first explored, the

liquidation has commenced by that mode from the same date. We find that it is

Page 20 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

exactly the position here. By the Liquidation Order, the Adjudicating Authority

did not merely record a stray recommendation; it directed, in express terms, that

the Liquidator shall endeavour to sell the Corporate Debtor as a going concern in

terms of Regulation 32A, and prescribed the fall-back course to be followed only

if he was unable to do so in ninety days. The going-concern sale was thus the

primary, judicially ordered mode of liquidation from 21.02.2024. The case before

us is, if anything, stronger than Garden Court (supra), because the direction here

is not only recorded but operative.

42. We however find that the Adjudicating Authority adopted a different view

that the commencement occurs only when the auction notice is issued or the Asset

Sale Process Document is finalised. We find no basis for it. Neither the Code nor

the Liquidation Regulations nor the Amendment Regulations says so. We

reiterate that a saving clause in delegated legislation must be read according to its

language and the scheme it serves and there was no need to add to it a condition

which the Parliament chose not to impose. The issuance of an auction notice is a

step in the execution of a sale process that has already commenced, and not the

event which brings that process into being. Treating the last stage as the date of

commencement would make the saving clause almost meaningless, since it would

protect only those cases in which the sale was already at the point of public

advertisement, and would expose every liquidator in mid-process to the vagaries

of timing.

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Comp. App. (AT) (Ins) No. 1297 of 2026

43. We have noted that the recommendation under Regulation 39C was made

by the CoC in the exercise of its commercial wisdom, by a 100% vote, upon

failure of all attempts at resolution. The Hon'ble Supreme Court has repeatedly

held that the commercial wisdom of the CoC is non-justiciable and that the

Adjudicating Authority and this Appellate Tribunal do not sit in appeal over it in

terms of the ratio of the Hon'ble Supreme Court in cases of K. Sashidhar v.

Indian Overseas Bank, (2019) 12 SCC 150; Committee of Creditors of Essar

Steel India Limited v. Satish Kumar Gupta, (2020) 8 SCC 531. The decision to

attempt a going-concern sale is a commercial judgment aimed at value

maximisation and preservation of the enterprise.

44. We note that even for arguments' sake, if contrary to the above, some overt

acts of the Liquidator were required to show commencement, such acts are

present on the record. Immediately after the Liquidation Order, the Liquidator

constituted the SCC, convened its first meeting on 01.03.2024 and placed the

CoC's recommendation before it, discussed the assets and liabilities to be

included in the sale and at the second meeting on 09.05.2024 placed before the

SCC the proposed reserve price, marketing strategy, auction process and draft

sale notice. The Impugned Order, as pleaded in the Appeal, does not deny that

these steps were taken but treats them as preparatory. The distinction between

preparatory and commencement is, in our view, artificial and unsupported by

statute. The process of a going-concern sale is continuous: recommendation of

the CoC, liquidation order, constitution of the SCC, fixation of reserve price and

Page 22 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

of the marketing and auction strategy, publication of the notice, conduct of the

auction and declaration of the successful bidder. They are links in one chain and

cannot be split so as to locate the commencement only at the penultimate link.

The process of sale as a going concern had therefore commenced well before

14.10.2025 on any view of the matter.

45. It is an undisputed fact that, by order dated 28.05.2024, this Appellate

Tribunal restrained the Liquidator from issuing any auction notice pursuant to the

Liquidation Order, and that restraint continued until Company Appeal (AT)

(Insolvency) No. 1047 of 2024 was decided on 11.05.2026. The Liquidator was,

during that entire period, legally disabled from taking the very step on which the

Adjudicating Authority has relied to hold that the sale had not commenced. It is

a settled principle that an act of the court cannot and should not prejudice any one

and the law does not compel a person to do what is rendered impossible by an

order of a competent court. To hold against the Liquidator, on the ground that he

did not issue an auction notice in a period in which issuing itself, was forbidden

by this Appellate Tribunal, would be to penalise him for compliance with a

judicial order.

46. We are conscious that the ninety-day period mentioned in the Liquidation

Order had elapsed by the time the restraint order was passed. The ninety days was

a period set by the Adjudicating Authority in which the Liquidator was to

"endeavour" the sale; it was a directory time-limit that the same Authority was

competent to extend, and the application before it was precisely for such

Page 23 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

extension. The Liquidator had, within that period, constituted the SCC and

deliberated upon the reserve price, marketing strategy and draft sale notice. The

real question was not whether the period had lapsed, but whether the Liquidator

was at fault in not completing the sale. The record discloses no such fault. The

failure to complete was due to the litigation initiated by the erstwhile management

and to the orders passed in it.

47. We would like to mention that in case of Ashok Kumar Gulla (supra),

this Appellate Tribunal, while examining successive amendments introduced

during the pendency of a liquidation, held that the Regulations were to be

examined "as they stood on the date when the liquidation order was issued." We

have no reason to take a different view. The Regulations on 21.02.2024 included

Regulation 32A and clauses (e) and (f) of Regulation 32. The Liquidation Order

was passed under that framework, and the obligations and entitlements flowing

from it, including the Liquidator's duty to endeavour a going-concern sale, are to

be tested by it.

48. We would like to take into consideration that the Hon'ble Supreme Court

in Swiss Ribbons Pvt. Ltd. v. Union of India, (2019) 4 SCC 17 has recognised

that the Code is aimed at resolution and maximisation of value of assets of the

corporate debtor and balancing the interests of all stakeholders. A sale of an

enterprise as a going concern preserves its value, employment and supply chains,

in a manner that a piecemeal liquidation cannot. In Garden Court (supra), the

coordinate bench of this Appellate Tribunal recorded the serious consequences

Page 24 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

that follow for employees and primary creditors if a going-concern sale is

unsettled. The same considerations apply here, and the Impugned Order, by

compelling a piecemeal sale, defeats the very objective that the CoC, the

Adjudicating Authority and the Code seek to serve.

49. We would add that the Suspended Director, whose own appeal challenging

the Liquidation Order was dismissed on 11.05.2026, is hardly in a position to

profit from the delay caused by that appeal. A construction under which the

pendency of unsuccessful litigation brought by the erstwhile management defeats

the commercial decision of the CoC and the judicial direction of the Adjudicating

Authority would reward obstruction and invite strategic litigation. It would be

contrary to the scheme of the Code which seeks to discourage it.

50. We are of the view that since the going-concern sale had commenced on

21.02.2024, the regime under which the Liquidation Order was passed continues

to govern it, and it is open to the Adjudicating Authority to extend the time

originally fixed. The Liquidator was obstructed from 28.05.2024 to 11.05.2026

by judicial orders; that period stands excluded, as held by the Adjudicating

Authority itself in I.A. No. 2682 of 2026. The prayer of the Liquidator for

extension of time and permission to complete the sale, in terms of the Liquidation

Order, was therefore well founded and the Adjudicating Authority was in error in

rejecting it on the sole ground that the process had not commenced.

51. We are also conscious that two Benches of this Appellate Tribunal should

not take divergent views on the same question within weeks of each other, since

Page 25 of 26 Comp. App. (AT) (Ins) No. 1297 of 2026

that would only create uncertainty in the Adjudicating Authorities and before

liquidators who must act on it. We have, for the reasons recorded above,

independently reached the same conclusion as in Garden Court (supra), and we

are in respectful agreement with it.

52. For the detailed reasons above, we find merit in the appeal. The Appeal

succeeds. and the Impugned order is set aside. The parties will appear before the

adjudicating authority on 26th October 2026 and the adjudicating authority shall

take further course of action in accordance with law. There will be no order to

cost. IA, if any, stand closed.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) Sim Chinmayee Sinha

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