IBBI Amends Liquidation Process Regulations, 2025: Omits Regulations 31A(f) and 32A [Read Notification]

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The amendment refines the liquidation framework by removing redundant provisions and aligning the regulations with evolving insolvency practices. The new regulations come into effect from the date of publication in the Official Gazette and apply prospectively, meaning they will govern only those cases where liquidation by sale as a going concern has not yet commenced.

Key Amendment

(a) Omission of Regulation 31A(f):

In Regulation 31A, which lists stakeholders for the formation of a stakeholder consultation committee, clause (f) has been omitted. This change simplifies the composition of the committee and avoids overlapping representation among creditors and other stakeholders.

(b) Amendments to Regulation 32:

Regulation 32, which outlines the modes of sale during liquidation, has been updated to improve clarity and streamline the structure:

• In clause (c), the word “or” has been inserted after the semicolon for grammatical consistency.
• In clause (d), the semicolon has been replaced with a colon.
• Clauses (e) and (f) have been omitted, thereby reducing the number of sale modes and focusing on essential methods.
• In the proviso, the reference to “(f)” has been replaced with “(d)” to reflect these changes.

(c) Omission of Regulation 32A:

The amendment also omits Regulation 32A, which earlier dealt with the sale of the corporate debtor or its business as a going concern. This provision has been removed to enable a more streamlined liquidation approach and to harmonize the regulation with updated procedural frameworks.

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