SCHEDULE I - MODE OF SALE - Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

SCHEDULE I MODE OF SALE (Under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016) 1. Auction (1) Where an asset is to be sold through auction, a liquidator shall do so the in the manner specified herein. 6 [ (1A) Subject to provisions of regulation 2B, the liquidator shall issue a public notice of an auction for sale under regulation 32 within forty-five days from the liquidation commencement date unless the consultation committee advises to extend the timeline. (1B) The liquidator shall issue public notice for the next auction, in case of failure of the auction, within fifteen days from the last failed auction unless the consultation committee advises to deviate from the specified time period. (1C) Notwithstanding anything contained in this Schedule, the liquidator shall complete an auction process within thirty-five days from the issue of public notice for auction. (1D) The liquidator shall provide at least fourteen days from issue of public notice for submission of eligibility documents by prospective bidder. (1E) The liquidator shall provide to qualified bidder at least seven days, for inspection or due diligence of assets under auction, from the date of declaration of qualified bidder. (1F) A prospective bidder in an auction process shall deposit earnest money deposit at least up to two days before the date of auction. ] (2) The liquidator shall prepare a marketing strategy, with the help of marketing professionals, if required, for sale of the asset. The strategy may include- (a) releasing advertisements; (b) preparing information sheets for the asset; (c) preparing a notice of sale; and (d) liaising with agents. (3) The liquidator shall prepare terms and conditions of sale, including reserve price, earnest money deposit as well as pre-bid qualifications, if any. 3 [ Provided that the liquidator shall not require payment of any non-refundable deposit or fee for participation in an auction under the liquidation process: Provided further that the earnest money deposit shall not exceed ten percent. of the reserve price. ] 8 [ Provided further that the liquidator shall mention in the auction notice, the period extended under clause (h) of sub-regulation (1) of regulation 31A. ] 9 [ (4) The reserve price shall be the value of the asset arrived at in accordance with regulation 35 and where an auction fails, the reserve price in subsequent auctions may be further reduced by not more than ten percent at a time: Provided that in cases where the reserve price of the failed auction of the asset was fixed as per the valuation under sub-regulation (1) of regulation 35, the liquidator may, on the advice of the consultation committee, reduce the reserve price up to twenty-five percent, once during the process. ] (5) The liquidator shall 4 [ issue a public notice ] of an auction in the manner specified in Regulation 12(3); Provided that the liquidator may apply to Adjudicating Authority to dispense with the requirement of Regulation 12(3)(a) keeping in view the value of the asset intended to be sold by auction. (6) The liquidator shall provide all assistance necessary for the conduct of due diligence by interested buyers. 7 [ (7) From a date to be notified through circular by the Board, the liquidator shall sell the assets only through an electronic auction platform empanelled by the Board. ] (8) If the liquidator is of the opinion that a physical auction is likely to maximize the realization from the sale of assets and is in the best interests of the creditors, he may sell assets through a physical auction after obtaining the permission of the Adjudicating Authority. The liquidator may engage the services of qualified professional auctioneers specializing in auctioning such assets for this purpose. (9) An auction shall be transparent, and the highest bid at any given point shall be visible to the other bidders. (10) If the liquidator is of the opinion that an auction where bid amounts are not visible is likely to maximize realizations from the sale of assets and is in the best interests of the creditors, he may apply, in writing, to the Adjudicating Authority for its permission to conduct an auction in such manner. (11) If required, the liquidator may conduct multiple rounds of auctions to maximize the realization from the sale of the assets, and to promote the best interests of the creditors. 5 [ (11A) Where the liquidator rejects the highest bid in an auction process, he shall intimate the reasons for such rejection to the highest bidder and mention it in the next progress report. ] 2 [ 10 [ (12) On the close of the auction, the highest bidder shall be invited to provide balance sale consideration within ninety days or such period as mentioned in the auction notice under clause 3, of the date of such demand: Provided that payments made after thirty days shall attract interest at the rate of twelve per cent.: Provided further that the sale shall be cancelled if the payment is not received within the period provided under this clause. ] (13) On payment of the full amount, the sale shall stand completed, the liquidator shall execute certificate of sale or sale deed to transfer such assets and the assets shall be delivered to him in the manner specified in the terms of sale. ] 2. Private Sale (1) Where an asset is to be sold through private sale, a liquidator shall conduct the sale in the manner specified herein. (2) The liquidator shall prepare a strategy to approach interested buyers for assets to be sold by private sale. (3) Private sale may be conducted through directly liaising with potential buyers or their agents, through retail shops, or through any other means that is likely to maximize the realizations from the sale of assets. 11 [ (3A) The private sale shall be confirmed to the buyer after consultation with the consultation committee under regulation 33. ] (4) The sale shall stand completed in accordance with the terms of sale. (5) Thereafter, the assets shall be delivered to the purchaser, on receipt of full consideration for the assets, in the manner specified in the terms of sale. ********* Notes 1. Substituted vide NOTIFICATION No. IBBI/2019-20/GN/REG047 dated 25-07-2019 before it was read as (4) The reserve price shall be the value of the asset arrived at in accordance with Regulation 34. Such valuation shall not be more than six months old. However, in the event that an auction fails at such price, the liquidator may reduce the reserve price up to seventy-five per cent of such value to conduct subsequent auctions. 2. Substituted vide NOTIFICATION No. IBBI/2019-20/GN/REG047 dated 25-07-2019 before it was read as (12) On the close of the auction, the highest bidder shall be invited to provide balance sale consideration within fifteen days of the date when he is invited to provide the balance sale consideration. On payment of the full amount, the sale shall stand completed, the liquidator shall execute certificate of sale or sale deed to transfer such assets and the assets shall be delivered to him in the manner specified in the terms of sale. 3. Inserted vide Notification No. IBBI/2021-22/GN/REG079 dated 30-09-2021 4. Substituted vide Notification No. IBBI/2021-22/GN/REG079 dated 30-09-2021 before it was read as make a public announcement 5. Inserted vide Notification No. IBBI/2021-22/GN/REG079 dated 30-09-2021 (11A) Where the liquidator rejects the highest bid in an auction process, he shall intimate the reasons for such rejection to the highest bidder and mention it in the next progress report. 6. Inserted vide Notification No. IBBI/2022-23/GN/REG094 dated 16-09-2022 , 7. Substitute vide Notification No. IBBI/2022-23/GN/REG094 dated 16-09-2022 , before it was read as :- (7) The liquidator shall sell the assets through an electronic auction on an online portal, if any, designated by the Board, where the interested buyers can register, bid and receive confirmation of the acceptance of their bid online. 8. Inserted vide Notification No. IBBI/2023-24/GN/REG112 dated 12-02-2024 9. Substituted vide Notification No. IBBI/2023-24/GN/REG112 dated 12-02-2024 before it was read as, 1 [ (4) The reserve price shall be the value of the asset arrived at in accordance with regulation 35. (4A) Where an auction fails at the reserve price, the liquidator may reduce the reserve price by up to twenty-five percent of such value to conduct subsequent auction. (4B) Where an auction fails at reduced price under clause (4A), the reserve price in subsequent auctions may be further reduced by not more than ten percent at a time. ] 10. Substituted vide Notification No. IBBI/2023-24/GN/REG112 dated 12-02-2024 before it was read as, (12) On the close of the auction, the highest bidder shall be invited to provide balance sale consideration within ninety days of the date of such demand: Provided that payments made after thirty days shall attract interest at the rate of 12%: Provided further that the sale shall be cancelled if the payment is not received within ninety days. 11. Inserted vide Notification No. IBBI/2023-24/GN/REG112 dated 12-02-2024