On 14 October 2025, the Insolvency and Bankruptcy Board of India (“IBBI”) promulgated the IBBI (Insolvency Resolution Process for Corporate Persons) (Sixth Amendment) Regulations, 2025. This amendment made three principal changes: the complete omission of Regulation 39C, targeted edits to Regulation 39D, and a revision of the compliance Form H. These amendments came into force immediately upon gazette notification. They follow the Fifth Amendment in July 2025 and continue a sequence of incremental reforms to the Corporate Insolvency Resolution Process (CIRP) Regulations, 2016.

In this piece, we trace the evolution of these provisions, analyze the legal effects of the changes, and consider their likely impact on insolvency practice.

Historical Evolution of “Going Concern” Provisions in Liquidation Regimes
Regulation 39C and the related provisions in the Liquidation Regulations were introduced in 2019 to facilitate sale of a distressed company as a going concern at the liquidation stage. The 2019 amendments (Second Amendment to CIRP and Liquidation Regulations) added Reg. 39C to the CIRP Rules and Reg. 32A to the Liquidation Process Regulations. Reg. 39C empowered the Committee of Creditors (CoC), upon approving a liquidation order under Section 33 of the IBC, “to recommend that the liquidator may first explore sale of the corporate debtor as a going concern” under the Liquidation Regulations. It also required the CoC to identify assets/liabilities to be sold as going concern, and to forward this recommendation to the Adjudicating Authority. Correspondingly, Regulation 32 of the Liquidation Regulations authorized the liquidator to sell the corporate debtor or its business as a going concern.

These 2019 provisions reflected a policy push to maximize asset value by preserving business continuity in liquidation. However, practical experience soon revealed issues. For example, insolvency tribunals noted that a going-concern sale process under Reg. 39C–32A did not require prior court approval, meaning the CoC and liquidator could proceed without Adjudicating Authority sanction. In Panipat Texo Fabs (NCLT Panipat), the tribunal held that once the liquidator, acting on CoC recommendation under Reg. 39C, had already sold the debtor as a going concern under Reg. 32A, no belated NCLT approval was needed. More broadly, by 2024–25 the IBBI and parliamentary Committees observed that going-concern sales had yielded modest recoveries compared to piecemeal asset sales. A 2025 discussion paper reported recoveries of only 75% of the liquidated value (2.4% of claims) via going-concern sales, versus 101% (3.7% of claims) through regular dissolution.

Omission of Regulation 39C
Regulation 39C of the CIRP Regulations, which had empowered the CoC to recommend a going-concern sale upon liquidation, is now deleted. This is a significant change. In practice, Reg. 39C had created an additional step at the end of a failed resolution process: if a plan could not be approved, the CoC might still arrange for a going-concern sale of the business under the liquidation regime. Its deletion “simplifies the overall resolution process” by eliminating overlap with liquidation rules. In other words, once a resolution plan fails, the process flows directly to liquidation without a separate mandated “going-concern exploration” phase under the CIRP Regulations.

The legal effect is that CoCs need no longer make a formal going-concern recommendation in the approval process. This change is mirrored in Form H (discussed below). For the resolution professional and CoC, omitting Reg. 39C means that the contingency of sale-as-going-concern under a failed plan simply ceases to be part of the CIRP regulatory scheme. The CoC’s decision after a plan’s rejection will be to either allow liquidation to proceed in the usual way (selling assets) or to approve a plan, with no in-between step. In effect, liquidation becomes the expected outcome on failure, without the extra procedure.

Revision of Form H
Form H is the standard “Compliance Certificate” that the resolution professional files with the court upon submitting an approved plan. Paragraph 15 of Form H collects miscellaneous information on “Other compliances.” Previously, item 15(b) specifically asked whether the CoC had recommended a going-concern sale under Reg. 39C: it listed “(i) Sale of corporate debtor as a going concern: Yes/No” and “(ii) Sale of business of corporate debtor as a going concern: Yes/No”. The Sixth Amendment now removes point (b) from paragraph 15, meaning Form H will no longer require the RP to report any CoC recommendation under Reg. 39C. This change follows directly from deleting Reg. 39C itself. Formally, it dispenses with boilerplate that has become obsolete.

The removal of Form H paragraph 15(b) will slightly lighten RPs’ compliance burdens. It also signals that the formal process of recording a going-concern recommendation at plan-submission is no longer part of the code. In practical terms, future Form H (when filed on or after 14 October 2025) will simply omit those Yes/No questions about going-concern sales. The paragraph 15(c) (regarding Reg. 39D fee fixation) remains but now only references clauses (a) and (c) of Reg. 39D. Thus, altogether, the Sixth Amendment excises all traces of Reg. 39C from the resolution-stage paperwork, bringing consistency across the regulations and forms.

Policy Rationale and Regulatory Philosophy
The IBBI has justified these changes as part of an effort to streamline and simplify insolvency processes. Both the insolvency authority and practitioners have noted that the going-concern sale mechanism had proven unwieldy. The IBBI itself observed that the amendments aim to “simplify the overall resolution process” and remove overlaps.

The data support this rationale. As noted above, empirical studies (including IBBI’s own analysis) found that creditors recovered less value through going-concern sales than through simple asset liquidation. Going-concern attempts often entailed extra costs of running the business while in limbo, and multiple auctions with known reserve prices (leading buyers to game the process).

Another strand of rationale is harmonization with the IBC’s objectives. The Standing Committee emphatically said that permitting going-concern sales in liquidation was at odds with the idea that liquidation is a terminal process, not a revival tool. By deleting Reg. 39C and its counterparts, the IBBI underscored that once a corporate debtor enters liquidation, the focus shifts to breakup and distribution. This suggests a shift in regulatory philosophy: reinstating the principle that only the CIRP (resolution) phase is meant for rescue (i.e. keeping the business running), whereas the liquidation phase is solely for winding up. The Sixth Amendment thus signals that the IBBI will no longer blur that line with hybrid sales.

At the same time, the Board observed fairness considerations: the new rules apply only to liquidations “where the ‘sale as going-concern’ has not yet commenced,” so as to avoid disrupting ongoing sales, respecting legal certainty for all stakeholders. In short, the policy motivation was to cut out a provision judged to be counterproductive, while ensuring that existing cases in progress remain unaffected.

Impact on Resolution Professionals (“RPs”), Creditors, and Debtors
For RPs, these amendments simplify their duties. They no longer need to advise CoCs on any sale-as-going-concern strategy for a failing plan, nor to include related disclosures in Form H. In general, the administrative burden of handling going-concern auction procedures (which had been somewhat novel and untested under IBC) is removed. In fixing liquidator fees under Reg. 39D, CoCs now consider only compromise periods and remaining liquidation work, without a separate calculation for going-concern marketing.

Creditors stand to benefit, arguably, from faster and more predictable recoveries. The removal of going-concern auctions should eliminate delays and extra-legal contests over such sales. This can have mixed effects: on one hand, it may speed up realization of assets (good for creditors anxious for a return). On the other hand, bidders specifically interested in the intact business (for example, to preserve licenses or employee continuity) will now only find the CIRP path viable, not liquidation. In practice, however, the number of liquidations actually conducted via going-concern sale was relatively small (103 cases to June 2025). Thus, most creditor committees may not feel a dramatic change. Still, creditors may interpret the amendment as reinforcing that liquidation means break-up, so they will press CoCs harder to adopt a viable plan rather than rely on a liquidation sale to save value.

For distressed companies themselves, the deletion of Reg. 39C likely makes little difference to the central resolution outcome: either a plan is approved and the company survives, or it goes to liquidation and is wound up. What changes is that, after a resolution failure, there is no special emphasis on selling the company whole. If a going-concern sale would have been ideal for the debtor’s business continuity, that option now effectively disappears in the liquidation stage. Any hope of a business sale will have to be captured in the resolution plan stage instead. On a positive note, debtors may find the process clearer: the transition from CIRP to liquidation is now more straightforward. Ultimately, the amendment underscores that the “save-the-company” push belongs to the resolution process, and once that fails, the corporate debtor faces breakup. This clarity may influence strategy: RPs and debtors will ensure that if a going-concern sale is ever contemplated, it is built into the restructuring plan, rather than relying on post-liquidation mechanics.

Comparative Perspective
The revised approach is not without international parallels. In the US Chapter 11 context, debtors often achieve a going-concern sale via Section 363 and then convert to Chapter 7, but that sale is facilitated by court order as part of the chapter 11 process. Chapter 7 liquidations themselves typically involve piecemeal asset sales. India’s IBC had created a hybrid where liquidation (akin to Chapter 7) could support a going-concern sale, but now it will align more with pure Chapter 7 in ending the corporate life. In the UK, administration (analogous to IBC’s CIRP) is meant to rescue or realize the business, whereas liquidation (creditor’s voluntary winding up or compulsory winding up) generally results in dissolution with only asset sales. By deleting Reg. 39C, IBBI effectively reserves going-concern sales for the “rescue” phase (CIRP) and not for liquidation, similar to UK practice. Thus, a global comparison suggests that IBBI’s move brings India’s regime closer to one where liquidation is strictly terminal, as in many jurisdictions.

Conclusion
The Sixth Amendment to the CIRP Regulations constitutes a targeted reform driven by operational lessons and policy coherence. By removing Regulation 39C and related provisions, it eliminates a mechanism that had proven cumbersome and of limited benefit. In doing so, the IBBI has signaled a regulatory philosophy that views the CIRP as the arena for rescue and the liquidation phase as the arena for closure. These changes will streamline the work of insolvency professionals and creditor committees, at the cost of foreclosing the once-available going-concern sale channel in liquidation. Whether this simplifies outcomes and enhances recoveries remains to be seen, but the rationale, backed by data and legislative scrutiny, is clear: a cleaner, more predictable insolvency process. Future commentary and case law may reveal further nuances, but for now the Sixth Amendment definitively marks a shift in the IBC regulatory landscape.