Garden Court Distilleries Private ... vs Mr. Akhil Ahuja Liquidator Of Honest ...

COMPANY APPEAL (AT)(INS) NO.1138 OF 2026 (Arising out of judgement and order dated 17.06.2026 passed by National Company Law Tribunal, Ahmedabad in IA NO.678/2026 in CP CP(IB) No.269 of 2023) IN THE MATTER OF: State Bank of India, SAMB Branch III 112,115, 1 floor, Plot No. 212, West Wing, Tulsiani Chambers, Free Press Journal Marg, Nariman Point, Mumbai 400021. Appellant

Vs

1. Garden Court Distillieries Pvt Ltd, 403, 4th floor, Raaheja Plaza, Off. Veera Desai Road, Andheri (West) Mumbai 400053

2. Mr. Akhil Ahuja, Liquidator of Home Derivatives Pvt Ltd, Floor No.8, Flat No.803, Chandak Cornerstone, David S, Barretto Road, Worli, Mumbai Maharashtra 400018

Respondents

For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Ms. Ekta Choudhary, Mr. Gaurav Raj Grover, Advocates.

For Respondent: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Himanshu Satija, Ms. Ripul Swati, Mr. Suyash Shrivastava, Mr. Aridaman Raghav, Advocates for R1 Mr. Sumant Batra, Mr. Sarthak Bhandari, Ms. Riya Kaur Arora, Mr. Aditya Jain, Advocates for Liquidator. Ms. Shreya Moondhra, Advocate 2

WITH

COMPANY APPEAL (AT)(INS) NO.1145 OF 2026 IN THE MATTER OF: Garden Court Distillieries Pvt Ltd, 403, 4th floor, Raaheja Plaza, Off. Veera Desai Road, Andheri (West) Mumbai 400053 Appellant

Vs

1. Mr. Akhil Ahuja, Liquidator of Home Derivatives Pvt Ltd, Floor No.8, Flat No.803, Chandak Cornerstone, David S, Barretto Road, Worli, Mumbai Maharashtra 400018

2. State Bank of India, SAMB Branch III, 112-115, 1st floor, Plot No.212, West Wing, Tulsiani Chambers, Free Press Journal Marg, Nariman Point, Mumbai 400021 Respondents

For Appellant: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Himanshu Satija, Ms. Ripul Swati, Mr. Suyash Shrivastava, Mr. Aridaman Raghav, Advocates

For Respondent: Mr. Sumant Batra, Mr. Sarthak Bhandari, Ms. Riya Kaur Arora, Mr. Aditya Jain, Advocates for Liquidator. Ms. Shreya Moondhra, Advocate

JUDGEMENT

JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL) The present Appeal assails the Impugned Order dated 17.06.2026 passed

by the Hon'ble NCLT, Ahmedabad Bench in I.A. No. 678 (AHM) of 2026 in C.P. 3

(IB) No. 269 (AHM) of 2023, whereby the application filed by the Appellant,

the successful auction purchaser of the Corporate Debtor as a going concern,

seeking necessary reliefs and concessions for implementation of the sale was

rejected. The core issue is whether, while considering such consequential reliefs,

the Adjudicating Authority could have effectively revisited its earlier liquidation

order dated 10.10.2025, which had admitted Corporate Debtor into liquidation

under Section 33(2) of the Code and expressly recorded the Committee of

Creditor's decision to first explore its sale as a going concern.

2.I It is argued the Impugned Order proceeds on an erroneous application of

the IBBI (Liquidation Process) (Second Amendment) Regulations, 2025, notified

on 14.10.2025, despite the liquidation having already commenced on

10.10.2025, the liquidation order itself stipulating that it would be "effective from

the date of this order." It is argued in the absence of any express retrospective

operation, the subsequent amendment could not retrospectively invalidate a

liquidation process already ordered by the Adjudicating Authority, merely

because subsequent steps in the sale process were undertaken after 14.10.2025

and the auction and sale as a going concern were steps in furtherance of the

liquidation process already commenced on 10.10.2025 and could not be treated

as a fresh process governed by a subsequent regulatory regime.

3. The Respondents have also argued on similar lines. Heard. 4

4. Before coming to the facts, we need to note that prior to the Amendment

Notification dated 14.10.2025, Regulation 39C of the IBBI (Insolvency Resolution

Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations"), inter alia,

contemplated that while deciding to liquidate the Corporate Debtor under

Section 33 of the Code, the Committee of Creditors could recommend in the event

of liquidation of the corporate debtor, the liquidator first explore the sale of the

Corporate Debtor as a going concern under Regulation 32(e) of the IBBI

(Liquidation Process) Regulations, 2016 ("Liquidation Regulations").

5. It is pertinent to mention Section 33(2) of the Code provides Committee of

Creditors may at any time during CIRP but before confirmation of resolution

plan, decide to liquidate the corporate debtor by 66% voting share. The

Regulation 39C also casts a duty on the RP to place the decision of the Committee

of Creditors before the Adjudicating Authority while filing an application for

liquidation under Section 33.

6. The unamended Regulation 39C(1) expressly provided as follows:

"39C. (1) While approving a resolution plan under section 30 or deciding to liquidate the corporate debtor under section 33, the committee may recommend that the liquidator may first explore sale of the corporate debtor as a going concern under clause (e) of regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 or sale of the business of the corporate debtor as a going concern under clause (f) thereof, if an order for liquidation is passed under section 33.

(2) Where the committee recommends sale as a going concern, it shall identify and group the assets and liabilities, which according to the commercial considerations, ought to be sold as a going concern under clause € or clause (f) of regulation 32 of 5

the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

(3) The resolution professional shall submit the recommendation of the committee under sub-regulations (1) and (2) to the Adjudicating Authority while filing the approval or decision of the committee under section 30 or 33, as the case may be."

7. Now, in the present case, the Committee of Creditors had, in its

commercial wisdom, vide Resolution No. 5, specifically resolved the Liquidator

should first explore the sale of the Corporate Debtor as a going concern under

Regulation 32(e) of the Liquidation Regulations, in accordance with Regulation

39C of the CIRP Regulations. The said decision of the CoC was taken pursuant

to a duty cast on it by Regulation 39C. The decision of the CoC was specifically

placed before the Adjudicating Authority in I.A. No. 5/AHM/2025 filed by the RP

under section 33 of the Code. It was duly considered by the Adjudicating

Authority while passing the liquidation order dated 10.10.2025.

8. The liquidation order dated 10.10.2025 records the decision of the

Committee of Creditors taken under Regulation 39C, inter-alia, as follows:

"....XIX. In compliance of Regulation 39B of the CIRP Regulations, the Applicant had placed before the CoC a best estimate of liquidation cost, which was duly approved by the CoC in terms of Resolution No. 6.

XXI. Further, in terms of Resolution No. 5, the CoC resolved that the Liquidator shall first explore the sale of the Corporate Debtor as a going concern under Regulation 32(e) of the IBBI (Liquidation Process) Regulations, 2016, in accordance with Regulation 39C of the IBBI (Resolution Process for Corporate Persons), Regulations 2016....."

6 9. The Adjudicating Authority thereafter expressly ordered:

"17. In view of the above findings, it is hereby ordered as follows:

-

a) The Corporate Debtor - M/s Honest Derivatives Private Limited is admitted into liquidation in terms of the provisions of 33(2) of the Insolvency and Bankruptcy Code, 2016, to be conducted in accordance with Chapter III of the Code and the IBBI (Liquidation Process) Regulations, 2016 which shall be effective from the date of this order."

10. Thus, the order dated 10.10.2025 is a substantive order admitting the

Corporate Debtor into liquidation under Section 33(2) of the IBC, with the

liquidation expressly made effective from the date of the order.

11. The decision of the Committee of Creditors taken under Regulation 39C

was a part of the liquidation order as contemplated by Section 33 read with

Regulation 39C. In other words, 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.

12. The subsequent steps undertaken by the Liquidator, including the

exploration and conduct of the sale of the Corporate Debtor as a going concern,

were therefore steps taken in implementation of an already existing liquidation

order and the Committee of Creditors decision taken under Regulation 39C,

pursuant to the course of action approved by the Committee of Creditors and

expressly noticed by the Adjudicating Authority.

7

13. The auction process cannot be viewed in isolation from the liquidation

order dated 10.10.2025. 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.

14. Thus the principal error in the Impugned Order lies in treating the

Amendment Notification dated 14.10.2025 as though it retrospectively governed

a liquidation process which had already commenced on 10.10.2025.

15. This Appellate Tribunal in Company Appeal (AT) (Ins) No. 786 of 2023 titled

"Ashok Kumar Gulla vs State Bank of India & Ors.", while examining the

applicability of successive amendments introduced during the pendency of the

liquidation, categorically held that, while deciding the issue arising in the

liquidation, it was necessary to examine the Regulations "as they stood on the

date when the liquidation order was issued." The Tribunal accordingly applied

the provision existing on the date of the liquidation order and declined to apply

subsequent amendments so as to alter the rights and obligations arising from

the liquidation process. The relevant portion of the judgment is extracted herein

below:

"13. In the subsequent amendments to the 'Liquidation Process Regulations', Stakeholders Consultation Committee has been provided a role in fixation of fees of liquidator. While deciding the issue of liquidation fees, we have to restrict ourselves to examination of Liquidation Process Regulations as they stood on the date when the liquidation order was issued in this case. The liquidation order was issued on 15.10.2019.....

8 14. From perusal of the regulations as they existed on the date of liquidation order, it appears that the fees of the liquidator was to be either the fees decided by the CoC under Regulation 39D of IBBI (CIRP) Regulations, 2016 or a percentage of fee on the amount that is realised/ distributed during the liquidation process. The Regulations, as it existed at the time on the date of the liquidation order, do not envisage payment of any fees or remuneration to the liquidator on a monthly basis, if such fee is not fixed by the CoC under Regulation 39D of IBBI (CIRP) Regulations, 2016.

15. Considering the regulations as they existed at the time when liquidation order was issued in this case, and that no fees was fixed by the CoC, we are of the opinion that fees to be paid to the Liquidator in this case shall be as per the percentage prescribed in Regulation 4(2)(b) of IBBI (Liquidation Process) Regulations, 2016 on realization and distribution of proceeds from auction of assets. We find no reason to interfere in the order of the Adjudicating Authority. The appeal is dismissed. All pending IAs, if any, are closed. No order as to cost."

16. In the present case, therefore, the rights and obligations arising from the

liquidation process are required to be determined with reference to the

regulations prevailing on 10.10.2025, when Corporate Debtor was admitted into

liquidation. Significantly, the liquidation order itself records the Committee of

Creditors's Resolution No. 5 resolving that the Liquidator shall first explore the

sale of the Corporate Debtor as a going concern under Regulation 32(e) of the

Liquidation Regulations, in accordance with Regulation 39C of the CIRP

Regulations. The Adjudicating Authority thereafter expressly ordered the

Corporate Debtor be admitted into liquidation under Section 33(2) of the IBC and

that the liquidation "shall be effective from the date of this order." Thus, the

subsequent amendment dated 14.10.2025 cannot retrospectively alter the legal

character or foundation of a liquidation process which had already commenced

and had received the imprimatur of the Adjudicating Authority on 10.10.2025. 9

17. It is pertinent to note IBC proceedings are beneficial legislations i.e. for the

benefit of the creditors and stakeholders. IBC being a commercial wisdom driven

process with a primary goal of resolution and putting the Corporate Debtor back

on its feet, then in the facts and circumstances of this case, non-sale as going

concern would lead to loss of employment of 800+ employees if the factory is not

restarted; and the farmers are primarily the operational creditors in the area,

would lose significantly, who rely on selling their produce locally at high rate and

low transport cost. Non grant of reliefs and attempt to unsettle any sale, has

prejudiced not only the creditors but also these persons who are most affected.

18. The corporate debtor has been sold as a going concern with sole objective

of value maximization and on the basis of the legal understanding that the sale

of the corporate debtor as a going concern commenced from the date of the

liquidation order, wherein the Hon'ble Adjudicating Authority specifically

directed commencement of liquidation in terms of the provision of Section 33(2)

of the IBC, to be conducted in accordance with Chapter III of the Code and

IBBI(Liquidation Process), Regulations, 2016 which shall be effective from the

date of this order. Hence, the Respondent No. 1 is entitled to relief and

concessions as prayed.

19. Thus we hold that liquidation by sale as a going concern commenced on

10.10.2025 i.e., the date on which the Hon'ble Adjudicating Authority passed

the liquidation order in terms of Section 33 of the Code. In this regard, reliance

can be placed on the definition provided under Section 5(17) of the IBC which is 10

reproduced here as "liquidation commencement date" means the date on which

proceedings for liquidation commence in accordance with section 33 or section

59, as the case may be".

20. Thus, the Impugned Order so far as it wrongly interprets that liquidation

by sale of Corporate Debtor as a going concern had not commenced prior to the

coming in force of IBBI (Liquidation Process) (Second Amendment) Regulations,

2025, notified on 14.10.2025 thereby frustrating the commercial decision of the

CoC and jeopardizing a lawful concluded sale undertaken in accordance with

liquidation order dated 10.10.2025, stands set aside.

21. Thus we remand the matter before the Ld. NCLT to examine the reliefs and

concessions, if any, to be granted to the SRA in accordance with law, within two

weeks of receipt of this order.

22. With these observations the appeals stand disposed of. Pending

applications, if any, are also disposed of.

(Justice Yogesh Khanna) Officiating Chairperson

(Mr. Barun Mitra) Member (Technical)

(Mr. Ajai Das Mehrotra) Member (Technical) Dated:10-09-2026 bm