Authority: National Company Law Tribunal (NCLT), Kolkata Bench

Order Date: 10 June 2026

Case Overview

This application was filed by Mr. Partha Kamal Sen, the Liquidator of Prapti Fashions Private Limited (Corporate Debtor). The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on 18 October 2022 following an application by Reliance Commercial Finance Limited. A liquidation order was passed on 13 December 2024, with Mr. Sen appointed as Liquidator on 19 December 2024. The application sought permission under Section 35 and 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016, to conduct a private sale of the Corporate Debtor's unsold garment stock.

The Liquidator's contention was that the garment stock, part of the movable assets which also included machineries, office equipment, an Audi Car, and a Maruti Omni Van, had failed to attract any bids in three successive e-auctions. The secured creditor, Standard Chartered Bank, had already exercised its rights over the immovable property. The details of the failed auctions were:

  • First E-Auction: 28 February 2026 (No bids)
  • Second E-Auction: 25 March 2026, with a 10% reduced reserve price (No bids)
  • Third E-Auction: 16 April 2026, with a further 10% price reduction (No bids)

The Liquidator argued that the garments were perishable and had significantly deteriorated in value after eight years of non-use, being susceptible to fashion obsolescence. The proposal for a private sale was placed before the Stakeholders' Consultation Committee (SCC), comprising Punjab & Sind Bank and Authum Investment & Infrastructure Limited, during its 9th meeting on 06 April 2026, where the members took note of the situation.

The Tribunal analyzed the provisions of Regulation 33 of the Liquidation Regulations, which permits a private sale after prior permission from the Adjudicating Authority, particularly for assets likely to deteriorate in value. It also referred to Schedule I, which outlines the procedure for a private sale, requiring the Liquidator to prepare a strategy to approach interested buyers to maximize realizations.

Final Outcome

The application was allowed. The NCLT granted permission to the Liquidator to conduct a private sale of the garment stocks located at Paridhan Garments Park, SDF-4, 4th Floor, 19 Canal South Road, Kolkata-700015, in accordance with Section 35 of the IBC and Regulation 33 of the IBBI (Liquidation Process) Regulations, 2016. The Liquidator was also directed to make all possible endeavors to complete the liquidation process within the stipulated timeline. The application I.A. (IB) No. 633/KB/2026 was disposed of accordingly.

Topics: Insolvency Liquidation, Asset Sale, NCLT Order