Topic
NCLAT held that the IBBI Liquidation Process (Second Amendment) Regulations, 2025 apply prospectively only and cannot affect liquidation already started under the earlier regime. The ruling shields ongoing liquidation from retrospective changes, impacting creditors, liquidators and purchasers.
NCLAT has ruled that a technical failure in the e-auction platform excluding a bonafide bidder undermines the core IBC principle of value maximization, rendering the sale void. The liquidator’s duty to ensure fair, transparent, and non-discriminatory bidding cannot be outsourced to flawed systems - this sets a precedent for all future liquidation auctions under the Code.
NCLAT reinforces the finality of liquidation auctions under 'as is where is' terms, holding that bidders cannot challenge confirmed sales through post-bid enhancements unless fraud or procedural violations are proven. The ruling protects auction integrity and prevents last-minute bid manipulations, ensuring certainty for liquidators and successful resolution applicants under the Insolvency and Bankruptcy Code.
The NCLAT has ruled that under Section 48 of the Gujarat Value Added Tax Act, 2003, state tax authorities hold a statutory first charge over assets for VAT arrears, granting them secured creditor status in corporate insolvency proceedings - but this protection does not extend to CST dues. This clarifies the hierarchy of claims in liquidation and impacts how resolution professionals prioritize tax liabilities under Section 53 of the IBC.
NCLAT rules that secured creditors forfeit their right to realize security under Section 52 of the IBC if they fail to adhere to the 90-day timeline prescribed in Regulation 21A of IBBI Liquidation Regulations. The assets automatically vest in the liquidation estate upon non-compliance, impacting creditors' recovery strategies in insolvency proceedings.