Mr. Amitkumar Rishi Kumar Bhabhda & Ors & Ors. vs Amit Chandrashekhar Poddar & Ors & Ors.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
09.09.2026
Present: JUSTICE N. SESHASAYEE, MEMBER (JUDICIAL)

ARUN BAROKA, MEMBER (TECHNICAL)

Company Appeal (AT) (Insolvency) No. 221 of 2026


(Arising out of Order dated 12.12.2025 passed by the Adjudicating Authority
(National Company Law Tribunal, Mumbai Bench) in I.A. No. 5599 of 2023 in
C.P. (IB) No. 1620 of 2017)
IN THE MATTER OF:
Mr. AMITKUMAR RISHI KUMAR BHABHDA
L-132, Nandawan Layout
Hasanbag Police Chouki , Nandanvan,
Ayodhya Nagar, Nagpur – 440 024,
Maharashtra.

Mr. AMOL VIRENDRA AGGARWAL
L-132, Nandanwan Layout
Hasanbag Police Chouki,
Nandanvan, Ayodhya Nagar,
Nagpur – 440 024, Maharashtra.

Mr. NITIN MURLIDHAR AGRAWAL
Plot No. 222, Opp. Gowardhan Haweli Mandir
East Wardhanam Nagar, Bhandewadi
Nagpur – 440 008, Maharahstra. …Appellants

Vs

Mr. AMIT CHANDRASHEKHAR PODDAR
Liquidator of Seam Industries Limited
Akshat, 7, Vijay Nagar, Katol Road,
Nagpur – 440 013, Maharashtra.

INCOME TAX DEPARTMENT
Through Commissioner/Principal Commissioner/
Asst. Commissioner, Central Circle (4)(2),
Air India Building, Nariman Point
Mumbai – 400 002, Maharashtra.

REGISTRAR OF COMPANIES
100, Everest, Marine Drive
Mumbai – 400 002, Maharashtra. …Respondents

Present:
For Appellant : Mr. Sandeep Bajaj, Mr. Vipul Jai, Ms. Charmi Khurana,
Advocates

For Respondent : None

J U D G M E N T
(Hybrid Mode)

Per: Justice N. Seshasayee, Member (Judicial)
This appeal is preferred challenging an order of the Adjudicating Authority
(NCLT, Mumbai), dated 12.12.2025 in I.A. No. 5599 of 2023 in CP (IB) No.
1620 of 2017.
Facts
2. The order falls within a very narrow compass:

a) the appellant herein has purchased the Corporate Debtor (CD) as a
going concern in the liquidation proceedings. The liquidation
proceedings commenced on 30.06.2021. On purchase, a sale certificate
came to be issued on 07.08.2023. Subsequently thereto, the appellant
has taken out I.A.No. 5599 of 2023 seeking concession and waiver, as
well as protection in terms of Sec.32A of the IBC. The Adjudicating
Authority in essence has held that the appellant is not entitled to any
such benefit during the liquidation period, i.e. from 30.06.2021, the
date on which the Adjudicating Authority passed the order directing
liquidation of the CD, till the day before the sale certificate was issued.
The relevant portion of the impugned order reads as below:
Comp. App. (AT) (Ins.) No. 221 of 2026
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“…4.8 It is noted that 'the clean state' theory of resolution plan
as recognized and propounded by the Hon'ble Supreme Court
of India in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss
Asset Reconstruction Company Ltd. [6 2021 sec OnLine SC
313] has been extended in a few cases of sale of the corporate
debtor as a going concern during the liquidation process even
though statutory provisions supporting the clean slate theory
are limited to resolution plan. Further, it is proposed to
examine what reliefs and concessions, including waivers and
exemptions from statutory and other liabilities can legitimately
be granted by the Adjudicating Authority to facilitate the
operation of the corporate debtor's business.

4.15 As far as Reliefs and Concessions in respect of past
liabilities of the Corporate Debtor are concerned, the Hon'ble
NCLAT in the matter of Shantech International Pvt. Ltd. vs.
Devendra Singh, Liquidator of Venus Rolling Mills Pvt. Ltd.
[Company Appeal (A T)(lnsolvency) No. 1520 of 2024] followed
the principle that the waiver of liabilities with regard to dues
of the corporate debtor should be dealt with according to the
terms of the e-auction. In the present case, the Process
Information Document states that the liabilities of the
Corporate Debtor would be "settled, paid and extinguished" by
the liquidator as per the provisions of Section 53 of the Code
and the buyer would not be liable for such prior liabilities.
Once the proceeds from sale of the Corporate Debtor as a going
concern are distributed to all the stakeholders as per Section
53 of the Code, all claims and liabilities of the creditors,
whether contingent or crystallized, known or unknown,
disputed or undisputed, present or future stand settled. No
entity including any Government entity can claim any past
unpaid dues for pre-CIRP period from the Applicants as all
claims stand settled in accordance with Section 53 of the
Code. However, there can be no question of extinguishment of
claims up to the date of sale of the Corporate Debtor as a going
concern. When claims were filed as on the liquidation
commencement date, during the liquidation process, the plea
Comp. App. (AT) (Ins.) No. 221 of 2026
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that extinguishment of claims and liabilities should be granted
till the date of sale as going concern is not in consonance with
the statutory scheme contained in the Liquidation Process
Regulations. In view of the above, we hold that the Applicants
are not liable to this extent for past liabilities of the Corporate
Debtor.

4.19 With respect to reliefs over immunity for past actions,
Section 32A of the Code provides that the liability of a
corporate debtor, for offences committed prior to the
commencement of the CIRP will stand extinguished from the
date a resolution plan is approved by the adjudicating
authority or sale of liquidation assets, subject to certain
conditions being fulfilled. This immunity under Section 32A is
applicable once the approved resolution plan mandates a
change in the management of the corporate debtor if such
persons (1) were not directly or indirectly related to the old
management of the corporate debtor; or (2) have not abetted
or conspired for the commission of such an offence committed
by the corporate debtor. Subsection (2) seeks to extend the
warranty in respect of the properties of the corporate debtor
upon approval of the resolution plan or sale of liquidation
assets, while providing assurance against liability. Lastly,
sub-section (3) obligates any such persons to aid any
enforcement authority investigating under any applicable law.
It is pertinent to observe that the immunity provided under
Section 32A of the Code is premised on various conditions
being fulfilled. Subject to those conditions, the immunity can
be extended for the sale of liquidation assets…”

3. The operative portion is tabulated by the Adjudicating Authority, and
the relevant portion necessary for the present purpose is given below: -

Comp. App. (AT) (Ins.) No. 221 of 2026
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Sr. No. Reliefs, Exemptions and
Findings
Concessions
4) A direction to be issued by
Allowed to the
the Hon'ble NCLT stating all
extent in Para
claims or demands made or
4.15 above.
all prior period liabilities
Balance reliefs
and obligations owed or
Declined.
payable by the past
management whether
financial creditors or
operational creditors or any
other parties (including
government dues, statutory
dues such as Income Tax,
GST, TDS, Land Rent,
electricity dues Custom
Duty, PF, ESIC, service tax
etc.) whether known or
unknown, crystallized or
otherwise prior to the
auction date of corporate
debtor, to be considered
settled as per the NCL T
order and the balance
amounts to be written off in
full by the successful bidder
and shall stand
permanently extinguished
and the sale proceeds shall
be distributed in
accordance to Section 53 of
the Code. Also, if any
balance of Credit whether
Comp. App. (AT) (Ins.) No. 221 of 2026
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GST/Service Tax, Excise,
Sales Tax, or any other tax
credit of the Corporate
Debtor lying with the
Revenue authorities shall
be allowed to be carried
forward to the applicants.
5) From the NCLT Approval
Declined
Date, all inquiries,
investigations and
proceedings, whether civil
or criminal, suits, claims,
disputes, proceedings in
connection with the
Company or affairs of the
Company, including
proceedings before Debt
Recovery Tribunal and
consumer courts or any
other court, pending or
threatened, present or
future in relation to any
period prior to the NCL T
order date, or arising on
account of implementation
of this Plan shall stand
withdrawn and dismissed
and all liabilities and
obligations therefore,
whether or not set out in the
balance sheets of the
Company or the profit and
loss account statements of
Comp. App. (AT) (Ins.) No. 221 of 2026
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the Company will be
deemed to have been
written off fully, and
permanently extinguished
and no adverse orders
passed in the said matters
should apply to the
Company or the successful
bidder. Upon approval of
this auction sale, all new
inquiries, investigations,
notices, suits, claims,
disputes, litigations,
arbitrations or other
judicial, regulatory or
administrative proceedings
will be deemed to be barred
and will not be initiated or
admitted against the
Company in relation to any
period prior to the NCL T
order date.
6) The relevant Governmental
Declined
Authorities shall not initiate
any investigations/actions
or proceedings in relation to
any non-compliance with
Applicable Law by the
Company during the period
prior to the NCL T order
date. Neither shall the
successful bidder, nor the
Company nor their
Comp. App. (AT) (Ins.) No. 221 of 2026
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respective directors, officers
and employees appointed
on and as of NCL T order
date be liable for any
violation, liabilities,
penalties or fines with
respect to or pursuant to the
Company not having in
place the requisite licenses
and approvals required to
undertake its business as
per Applicable Law, or any
non-compliances of
Applicable Law by the
Company. Further, the
relevant Governmental
Authorities will provide a
reasonable period of time
after the NCL T order date,
for the successful bidder to
assess the status of any
non-compliances under the
Applicable Laws including
and to procure that the
Company regularizes such
compliances under the
Applicable Law existing
prior to the NCLT order date.

4. Placing reliance on the judgments in M/s Shiv Shakti Inter Globe Exports
Pvt. Ltd. Vs. M/s KTC Foods Private Limited & another [Comp. App. (AT)
(Ins.) No. 650 of 2020] and Paschimanchal Vidyut Vitran Nigam Ltd. Vs
Comp. App. (AT) (Ins.) No. 221 of 2026
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HSA Traders Through Sole Proprietor & others [Comp. App. (AT) (Ins.) No.
527 of 2023] of this Tribunal, the learned counsel for the appellant submitted
that entitlement to avail protection under Section 32A even during the
liquidation period has been recognized, and hence the Adjudicating Authority
ought to have granted protection for the liquidation period.

5. We find considerable merit in the submission of the learned counsel for the
appellant. So far as waiver and concessions are concerned, the appellant has
to approach the concerned statutory authorities. So far as Section 32A is
concerned, clean slate theory as developed in the Ghanshyam Mishra and
Sons Private Limited Vs Edelweiss Assets Reconstruction Company
Limited [(2021) SCC OnLine SC 313] is available even during liquidation.

6. This can be explained. When CIRP commences, unless the same is
withdrawn in the manner contemplated under Section 12A of the Code, it may
either conclude with the successful approval of a resolution plan under Sec.
31 of the Code or may proceed to liquidation under Section 33. So far as CIRP
goes, the primary intent of the legislature is to sell the CD as a going concern.
Reading Sec. 31 along with Sec. 14 implies that no liability can be created
during the CIRP process and if at all anything is created by the Resolution
Professional during the CIRP, the same is treated as part of CIRP cost. And,
the clean slate theory implies that past liability, if any, of the corporate debtor,
if remained unclaimed during CIRP or the liquidation cannot survive post
successful completion of the CIRP or where the CD is sold as a going concern
during liquidation. Indeed, it may not even be termed as waiver or concession
Comp. App. (AT) (Ins.) No. 221 of 2026
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stricto sensu, as it is the legal consequence when the CD is sold as a going
concern either during CIRP or during liquidation.

7. In conclusion, we allow this appeal and set aside that portion of the Order
of the Adjudicating Authority in I.A. No. 5599/MB/2023 in C.P. (IB) No.
1620/MB/2017, dated 12.12.2025, where it has declined concession for two
items, indicated as items 5 and 6 in paragraph 3 above, and it is held that the
appellants will be entitled to the benefit of Section 32A of the Code for these
two items and it is accordingly granted, subject however, to the fulfilment of
the conditions prescribed therein. No costs.




[Justice N. Seshasayee]
Member (Judicial)



[Arun Baroka]
Member (Technical)
rashmi
Comp. App. (AT) (Ins.) No. 221 of 2026
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