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Introduction
The Insolvency and Bankruptcy Board of India (IBBI) has issued the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2025 (the Amendment) on October 14, 2025. This significant regulatory change aims to simplify and streamline the liquidation process, particularly concerning the methods available for the sale of the Corporate Debtor’s assets.
The Amendment modifies the IBBI (Liquidation Process) Regulations, 2016 and will apply prospectively, specifically to those liquidation cases where the sale as a going concern has not yet commenced. The primary focus of these changes is to rationalize the options for asset realization and enhance procedural clarity for the liquidator.
Key Regulation
Deletion of the Committee of Creditors (CoC) Review (Regulation 31A)
The Amendment omits clause (f) of sub-regulation (1) of Regulation 31A. Regulation 31A pertains to the Consultation Committee assisting the liquidator. The deleted clause (f) likely dealt with the requirement for the liquidator to seek the concurrence or review of the Consultation Committee for certain significant decisions, particularly those concerning the sale of assets. This deletion simplifies the decision-making process for the liquidator during liquidation, potentially making the process faster and more efficient by removing a layer of mandatory committee review or documentation.
Rationalization of Asset Sale Methods (Regulation 32)
Regulation 32, which specifies the manner of sale of assets, has been significantly truncated by omitting clauses (e) and (f). The Amendment also makes consequential changes to clauses (c) and (d). The deleted clauses effectively eliminate two previously available options for the liquidator to sell the assets. This removes two specific methods of selling the assets of the Corporate Debtor, thereby limiting the options to those remaining in clauses (a) through (d) (which typically cover sale as a going concern, by auction/private sale, or disposal of assets not sold). The amendment in the proviso replaces the reference to the omitted clause “(f)” with the remaining clause “(d)”, ensuring that the remaining statutory safeguards or conditions (specified in the proviso) align correctly with the surviving sale methods.
Omission of Regulation 32A
The Amendment also directs the omission of the entire Regulation 32A. Regulation 32A, which was introduced in 2020, typically deals with the sale of the Corporate Debtor as a going concern. The deletion of this standalone regulation may suggest that the provisions for sale as a going concern are now integrated elsewhere in the regulations or that the IBBI is streamlining the framework by relying solely on the general mechanism of Regulation 32, as amended.
Here is a table summarizing the changes brought by the Amendment:
| Regulation Provision | Old Regulation (Prior to Oct 14, 2025) | New Regulation (Effective Oct 14, 2025) | Impact of Change |
| Reg. 31A(1)(f) (Consultation Committee) | Contained clause (f), which likely mandated the Liquidator to consult the Committee on specific liquidation actions (e.g., sale of assets). | Omitted (Clause (f) is deleted). | Streamlines Decision-Making: Removes a layer of mandatory consultation/review for the Liquidator, potentially speeding up the liquidation process. |
| Reg. 32(e) and (f) (Manner of Sale) | Included two specific methods for the sale of assets (clauses (e) and (f)). | Omitted (Clauses (e) and (f) are deleted). | Rationalizes Sale Methods: Limits the permissible methods of asset sale to those remaining (a) through (d), focusing the Liquidator on core realization strategies like sale as a going concern or sale by auction/private treaty. |
| Reg. 32 Proviso (Reference) | Referred to the omitted clause (f) in the proviso. | The reference is substituted with the letter and symbol “(d)”. | Consequential Alignment: Ensures that the conditions or safeguards in the proviso of Regulation 32 are correctly applied to the revised list of permissible sale methods. |
| Reg. 32A (Sale as Going Concern) | Contained a separate, dedicated regulation detailing the procedure for the sale of the Corporate Debtor as a going concern. | Omitted (The entire Regulation 32A is deleted). | Consolidation/Integration: Suggests that the procedure for the sale as a ‘going concern’ may now be handled under the general provisions of Regulation 32 (specifically 32(c)), simplifying the overall structure of the sale framework. |
Conclusion
The IBBI (Liquidation Process) (Second Amendment) Regulations, 2025 signals the regulator’s continued effort to refine the insolvency framework. By removing certain clauses from Regulations 31A and 32 and omitting the entire Regulation 32A, the IBBI appears to be pursuing two main objectives: accelerating the realization of assets by minimizing bureaucratic oversight from the Consultation Committee, and rationalizing the permissible methods of asset sale during liquidation.
This targeted cleanup of the regulations, effective immediately for future liquidation cases where a going concern sale hasn’t commenced, is a step towards making the liquidation process under the IBC more efficient and outcomes-focused. Liquidators must now operate strictly within the remaining defined methods and procedures for asset disposal.
Expositor(s): Adv. Shreya Mishra
