The National Company Law Tribunal (NCLT) had rejected the plea of Garden Court Distilleries Pvt Ltd, the successful auction purchaser of Home Derivatives Ltd as a going concern, for implementation of the sale.
The NCLT had rejected it on the grounds that the Insolvency and Bankruptcy Board of India (IBBI) removed provisions allowing the “sale of a corporate debtor or its business as a going concern” during liquidation.
The IBBI (Liquidation Process) (Second Amendment) Regulations, 2025, were notified on October 14, 2025. It now mandates asset dissolution in liquidation.
This was challenged before the appellate tribunal by Garden Court Distilleries, an exporter of sugar and Ethyl Alcohol (Rectified Spirit).
NCLAT says amended regulations cannot apply retrospectively
On this, a three-member bench, which comprised Officiating Chairperson Justice Yogesh Khanna, held that the liquidation of Home Derivatives, including its sale as a going concern, had commenced on October 10, 2025, when the NCLT admitted the company into liquidation under Section 33(2) of the Insolvency and Bankruptcy Code (IBC).
IBBI (Liquidation Process) (Second Amendment) Regulations, 2025, could not retrospectively govern a liquidation process that had already begun four days earlier.
The appellate tribunal said the NCLT has done a “principal error in the Impugned Order lies in treating the Amendment Notification dated October 14, 2025, as though it retrospectively governed a liquidation process which had already commenced on October 10, 2025”.
Garden Court Distilleries had emerged successful bidder
In its order, the NCLAT observed that the NCLT’s liquidation order had recorded the Committee of Creditors’ (CoC) stance that the liquidator must first explore selling Home Derivatives as a going concern.
Garden Court Distilleries emerged as the successful bidder for Home Derivatives in the subsequent auction.
However, when it moved NCLT Ahmedabad seeking reliefs and concessions to implement the sale, the tribunal, in its order dated June 17, 2026, held that the auction process -- having been conducted after October 14, 2025 -- was governed by the amended regulations, and rejected the plea.
NCLAT cites interests of creditors and stakeholders
Setting aside the NCLT order, the appellate tribunal said IBC proceedings are beneficial legislation, which is for the benefit of the creditors and stakeholders.
“IBC being a commercial wisdom-driven process with a primary goal of resolution and putting the Corporate Debtor back on its feet, then in the facts and circumstances of this case, non-sale as a going concern would lead to loss of employment of 800+ employees if the factory is not restarted; and the farmers are primarily the operational creditors in the area, would lose significantly, who rely on selling their produce locally at high rate and low transport cost,” it said.
Published on September 10, 2026
