Sale as Going Concern in Liquidation Upheld: Clean Slate Theory Validates Freedom from Prior Unpaid Liabilities

NCLAT upheld the sale of Corporate Debtor (CD) as a going concern in liquidation proceedings. The sale, conducted on 28.08.2023, complied with amended Regulation 32A(4) of IBBI Liquidation Process Regulations, requiring first-attempt sale without 90-day timeline restriction. The successful bidder's purchase price exceeded reserve price, and proceeds were distributed per Section 53 of IBC. The Tribunal's dismissal of application and adverse observations against liquidator were deemed erroneous. Applying clean slate theory, NCLAT confirmed that CD sale as going concern requires freedom from prior unpaid liabilities, with sale proceeds distributed to stakeholders. Petition allowed, validating liquidator's actions in executing compliant going-concern sale. .....

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