Authority: National Company Law Tribunal, Division Bench, Court-I, Ahmedabad

Order Date: 17 June 2026

Case Overview

The National Company Law Tribunal (NCLT) Ahmedabad heard two interconnected applications concerning the liquidation of Honest Derivatives Private Limited. IA No. 678 of 2026 was filed by Garden Court Distilleries Private Limited, the successful auction purchaser who acquired Honest Derivatives as a going concern for ₹30.6 crore, seeking various reliefs and concessions to facilitate the revival of the corporate debtor. IA(Liq.) Progress Report No. 54 of 2026 was filed by the Liquidator, Mr. Akhil Ahuja, seeking to place on record the first progress report for the quarter ended 31 December 2025.

Honest Derivatives was admitted into Corporate Insolvency Resolution Process (CIRP) on 3 July 2024 pursuant to an application by State Bank of India (sole COC member with 100% voting share). After failed resolution attempts, the Committee of Creditors (CoC) resolved on 16 May 2025 to liquidate the company while directing that sale as a going concern be explored first. The NCLT passed the liquidation order on 10 October 2025, appointing Mr. Akhil Ahuja as Liquidator and recording the CoC's resolution regarding going concern sale.

The critical legal issue arose from the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2025, notified on 14 October 2025, which omitted clauses (e) and (f) of Regulation 32 and Regulation 32A that governed sale of corporate debtors as going concerns. The amendment stated it would apply prospectively to cases where "liquidation by sale as a going concern has not commenced."

The Liquidator proceeded with the sale process despite the amendment, issuing an auction notice on 22 December 2025 and conducting e-auction on 8 January 2026 where Garden Court emerged as the highest bidder with ₹30.6 crore. The full payment was made on 7 February 2026, and a sale certificate was issued on 9 February 2026.

Garden Court sought various reliefs including concessions, permissions, and directions under Section 60(5)(c) of the IBC to facilitate the going concern revival, arguing that the process had commenced before the amendment through the CoC resolution and liquidation order. The company had already incurred expenses of ₹72,01,319 towards improvements and ₹59,09,412 towards interest expenses, with ongoing daily costs of approximately ₹23,000 for security and ₹83,835 for interest.

Final Outcome

The NCLT dismissed IA No. 678 of 2026 filed by Garden Court Distilleries, rejecting all reliefs and concessions sought. The tribunal held that the sale process for going concern had not commenced prior to the 14 October 2025 amendment, as mere CoC resolutions, SCC recommendations, or observations in the liquidation order did not constitute commencement of the sale process. The actual sale process commenced only with the auction notice issued on 22 December 2025, by which time the amended regulations were already in force and the statutory framework for going concern sales stood omitted.

The tribunal allowed IA(Liq.) Progress Report No. 54 of 2026, taking the Liquidator's progress report for the quarter ended 31 December 2025 on record. No costs were awarded.

Topics: Liquidation Process, Going Concern Sale, Regulatory Amendment