Authority: National Company Law Tribunal (NCLT), Division Bench – I, Chennai

Order Date: 09 June 2026

Case Overview

This application (RA(IBC)/2(CHE)/2025) was filed by Mr. G. A. Abimanyu Raja, the suspended managing director of Vijay Spinners Private Limited (Corporate Debtor), seeking a review and recall of a specific part of the NCLT's common order dated 14 November 2025. The applicant sought to remove the tribunal's direction that allowed the liquidator to sell the company's assets via a 'slump sale' if a final attempt to auction it as a going concern failed. The applicant argued this direction contravened a subsisting order from the National Company Law Appellate Tribunal (NCLAT) dated 05 February 2022, which directed that the company be maintained as a going concern during the pendency of his appeal against the initiation of Corporate Insolvency Resolution Process (CIRP).

The CIRP against Vijay Spinners was initiated on 09 December 2019 on a petition filed by Syndicate Bank (now merged with Canara Bank). The applicant's appeal against this order was initially dismissed in default by the NCLAT on 13 July 2023 but was later restored on 04 January 2024 and is still pending. Meanwhile, the Resolution Professional's application for liquidation was approved by the NCLT on 19 September 2022. This liquidation order specifically directed the liquidator to keep the company as a going concern until the NCLAT's final order and to take steps to sell it as such.

The liquidator conducted 11 e-auctions to sell the corporate debtor as a going concern, all of which failed. The Stakeholders Consultation Committee (SCC), in meetings held between 18-29 August 2025, deliberated and resolved that the company should first be attempted to be sold as a going concern, and if that failed, its assets could be sold via a slump sale. This decision was influenced by the company incurring continuous cash losses during liquidation, the withdrawal of operational support by HM Textiles, and a lack of support from the SCC. Furthermore, the Insolvency and Bankruptcy Board of India (IBBI) amended its Liquidation Process Regulations on 14 October 2025, omitting Regulations 32(e) and 32(f), which previously provided for the 'sale as a going concern'.

The NCLT's order dated 14 November 2025, passed after considering these developments, directed the liquidator to conduct one fresh e-auction within three months exclusively for the sale of the company as a going concern. It further stated that if no bidders came forward, the liquidator was to sell the assets on a slump sale basis. The applicant's primary contention in the present review application was that this latter part of the direction violated the NCLAT's 2022 order.

Final Outcome

The NCLT dismissed the review application. The tribunal reasoned that significant developments had occurred since the NCLAT's 2022 order, including the failure of 11 auctions, the SCC's commercial decision to permit a slump sale, the company's operational unviability leading to cash losses, and the subsequent amendment to the IBBI Regulations that omitted the provision for a mandatory 'sale as a going concern'. The tribunal found that the applicant had failed to make a case for reviewing its earlier order. The liquidator's attempt to conduct a fresh auction as a going concern on 20 March 2026 was also noted to be restrained by a separate injunction order from the Sub-Court in Rajapalayam concerning a piece of land.

The practical consequence is that the liquidator's path to liquidate the company's assets via a slump sale, as a last resort after a failed final auction, remains valid and in force.

Topics: Insolvency Litigation, Liquidation Process, Regulatory Amendment