NCLT & IBC Liquidation Auctions in India

What is an NCLT auction?

When a company cannot repay its creditors, a creditor can take it to the NCLT under the IBC. If no resolution plan is approved, the tribunal orders liquidation and appoints a liquidator, who sells the company's assets through a public e-auction to repay creditors.

These sales are also called IBC auctions, liquidation auctions or insolvency auctions. The seller is the liquidator acting for the corporate debtor — not a bank — which is why the notice names the liquidator and the company in liquidation.

What comes up in liquidation auctions

A liquidator may sell the whole company as a going concern, a business unit through a slump sale, or individual assets in separate lots.

• Company sold as a going concern or business unit on slump-sale basis
• Factories, plants, industrial sheds and warehouses
• Industrial, commercial and residential land
• Flats, offices and basements owned by the company
• Plant, machinery, equipment, vehicles and inventory

How the NCLT e-auction process works

Most liquidation sales follow the same steps, though the process document for each auction sets the exact dates and rules.

• Liquidator publishes the sale notice and an E-Auction Process Information Document
• Bidders submit eligibility documents, including a declaration under Section 29A of the IBC
• Earnest money deposit (EMD) is paid before the stated deadline
• Site inspection and due diligence, usually through a data room
• Online bidding on the stated platform with fixed bid increments
• Successful bidder pays the balance within the timeline, usually 90 days

NCLT auction vs bank SARFAESI auction

A SARFAESI auction is run by one secured lender to sell a single mortgaged property. An NCLT liquidation auction is run by a liquidator for all creditors and can include an entire business. Liquidation sales often offer larger lots and the option of buying a going concern.

Before you bid on an IBC asset

Read the process document fully, confirm Section 29A eligibility, and check outstanding statutory dues, GST on movable assets, and whether the sale is 'as is where is' with no recourse. Take legal and professional advice for complex or going-concern assets. This is general information, not legal advice.