The National Company Law Appellate Tribunal (NCLAT) in Chennai has recently held that a purchaser of a corporate debtor sold as a going concern in liquidation cannot claim rights over its subsidiaries, joint ventures, or associate entities merely because they belong to the same corporate group.
The tribunal ruled that such assets fall outside the liquidation estate and do not automatically pass to the successful bidder.
A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindra Nath Swain held that the insolvency framework expressly excludes subsidiary assets from the liquidation estate of a corporate debtor.
The bench ruled, “The provisions contained Section 36 (4) clearly stipulates and carves out an…