A liquidator may continue asset-sale processes initiated during CIRP after liquidation commences.

Jet Airways (India) Ltd. was admitted into insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) on 20 June 2019, following which an Interim Resolution Professional and subsequently a Resolution Professional were appointed.

During the CIRP, the Corporate Debtor’s Boeing 777-300ER and other aircraft were proposed to be sold through the Monitoring Committee. Letters of intent were issued to entities associated with the Ace Aviation Group on 12 October 2022, but the sale was not completed within the stipulated period.

The Adjudicating Authority directed completion of the sale on 17 October 2023; that direction was upheld by the NCLAT on 22 December 2023 and by the Supreme Court on 7 March 2024.

Subsequently, the Supreme Court ordered liquidation of Jet Airways on 7 November 2024, and liquidation proceedings commenced on 26 November 2024.

During liquidation, the Stakeholders’ Consultation Committee adopted and ratified the earlier sale process, and the liquidator proceeded with the transaction.

The buyers paid the balance consideration of USD 41.4 million on 22 January 2026, and the sale was disclosed to the stock exchanges on 11 February 2026.

The appellants, former employees of Jet Airways, challenged the sale before the NCLT, alleging undervaluation, absence of a fresh valuation, lack of transparent competitive bidding, improper involvement of a third-party facilitator, and illegality in continuing a CIRP-stage sale during liquidation.

The NCLT dismissed the application on 22 April 2026, holding that it was belated, intended to delay realization of the assets, and unsupported by any established illegality.

Whether the appellants, as former employees and stakeholders of the Corporate Debtor, had locus to challenge the sale of the aircraft assets on the ground that the sale proceeds would affect their dues under the liquidation waterfall.

Whether the liquidator could continue and complete the aircraft sale process initiated during the CIRP and subsequently adopted by the Stakeholders’ Consultation Committee during liquidation.

Whether the aircraft sale was vitiated by undervaluation, failure to conduct a fresh valuation or competitive bidding, conflict of interest, or violation of the liquidation framework.

Whether the NCLT’s dismissal of the appellants’ application was legally sustainable.

The Court applied Section 35 of the IBC, which imposes a duty on the liquidator to take custody and control of the Corporate Debtor’s assets and to sell them in accordance with the Code.

Section 36, as referred to in the judgment, provides that the Corporate Debtor’s assets form part of the liquidation estate upon commencement of liquidation.

Section 53 governs distribution of liquidation proceeds through the statutory waterfall, including payment of workmen’s and employees’ dues in accordance with the prescribed priority.

Regulation 31A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 requires constitution of the Stakeholders’ Consultation Committee, while Regulation 32 prescribes the modes of sale of assets and empowers the liquidator to conduct the sale, subject to the Code and applicable protections concerning secured creditors.

Regulation 37 governs treatment of security interests during liquidation.

The Court also relied on the earlier orders of the NCLT, NCLAT and Supreme Court approving or upholding completion of the aircraft-sale process.

The NCLAT held that the appellants’ status as former employees did not establish any material irregularity in the sale process.

Their legitimate interest was in receiving employment-related dues in accordance with Section 53, rather than in preventing realization of the Corporate Debtor’s assets.

The aircraft-sale decision had originated during the CIRP, had been directed to be completed by the NCLT, and had been upheld by both the NCLAT and the Supreme Court.

After liquidation commenced, the Stakeholders’ Consultation Committee expressly adopted and ratified the prior acts and the Asset Sale Process Memorandum by a substantial majority, and the liquidator continued the process under the statutory liquidation framework.

The Court found no demonstrated illegality in the liquidator’s continuation of the process.

The appellants’ allegations of undervaluation, absence of fresh valuation, non-transparent sale, third-party involvement and improper execution outside India remained unsubstantiated.

The prior judicial scrutiny of the sale, the SCC’s ratification, the completion of payment, and the appellants’ approximately sixteen-month delay in challenging the process further weakened their case.

Since the appellants failed to identify any material irregularity or violation of the IBC or liquidation regulations, the NCLAT upheld the NCLT’s refusal to interfere with the completed sale.

It held that the liquidator was entitled to continue and complete the aircraft sale initiated during the CIRP and adopted during liquidation, and that the appellants had failed to establish undervaluation, procedural illegality, conflict of interest or violation of the liquidation regulations.

The appellants’ dues were to be dealt with in accordance with the Section 53 waterfall mechanism.

The appeal was dismissed as meritless, with no order as to costs; pending applications, if any, were also disposed of.