The IBC was designed with a clear, sequential process – first, the Corporate Insolvency Resolution Process (CIRP) attempts to revive the corporate debtor. If that fails, liquidation ensures a swift and conclusive dissolution. However, the concept of ‘sale as a going concern’ in liquidation contradicts this framework, effectively keeping failed businesses on artificial life support. The Insolvency Law Committee (ILC) in its 2020 report explicitly stated that liquidation marks the end of an entity’s viability, and the Standing Committee on Finance (2021) recommended deleting Regulation 32(e) of the Liquidation Regulations for precisely this reason.
Empirical data highlights the failure of ‘going concern’ sales in liquidation….
