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JC - Legal Updates - Liquidator can seek closure of the Liquidation Process to sell CD as a going concern – NCLAT

Legal Updates

01 Sep 2021

Liquidator can seek closure of the Liquidation Process to sell CD as a going concern – NCLAT

The Hon’ble NCLAT has dealt with the issue whether the Liquidator is authorized to seek for the closure of the Liquidation Process and sell the ‘Corporate Debtor’ as a going concern pursuant to Regulation 32 of IBBI (Liquidation Process) Regulations, 2016 (Regulation).

It has been held by the Hon’ble NCLAT vide judgement dated 24th August 2021, in the matter of “M/s Mohan Gems & Jewels Private Limited Vs. Vijay Verma & Anr.’’ that the Insolvency and Bankruptcy Code, 2016 (“the Code”), does not prevent the closure of Liquidation Process, and the Liquidator would be authorised to sell the Corporate Debtor as a going concern.

The Hon’ble NCLAT has further observed that;-

1.    If the Liquidator, in terms of Regulation 32A is of the opinion that the sale under Regulation 32 (e) or (f) shall maximize the value of the Corporate Debtor he shall endeavour to sell; and

2.    the closure of Liquidation Proceedings can be done/carried out and dissolution of Corporate Debtor is not the only prospect provided for under liquidation by the Code.


For any further information, please contact Mr. Shubhabrata Chakraborti (shubhabrata.chakraborti@jclex.com) or Mr. Dhruv Malik (dhruv.malik@jclex.com).