State Bank of India Vs Garden Court Distillieries Pvt Ltd (NCLAT Delhi)
Summary: NCLAT Delhi held that liquidation by sale of a corporate debtor as a going concern had commenced on 10.10.2025, when the NCLT passed the liquidation order under Section 33 of the Insolvency and Bankruptcy Code, 2016 and expressly recorded the Committee of Creditors’ decision that the liquidator should first explore a going-concern sale under Regulation 32(e), read with Regulation 39C of the CIRP Regulations.
The Appellate Tribunal held that the IBBI (Liquidation Process) (Second Amendment) Regulations, 2025, notified on 14.10.2025, could not retrospectively alter the legal character of a liquidation process that had already commenced. Subsequent auction and sale steps were implementation of the existing liquidation order and not commencement of a fresh liquidation process.
Relying on Ashok Kumar Gulla Vs State Bank of India, NCLAT reiterated that rights and obligations in liquidation must be examined with reference to the regulations prevailing on the date of the liquidation order. It therefore set aside the impugned order insofar as it treated the 14.10.2025 amendment as applicable to the already commenced going-concern liquidation and remanded the matter to NCLT to examine the reliefs and concessions, if any, to be granted to the successful auction purchaser in accordance with law within two weeks.
