The National Company Law Tribunal's Mumbai Bench has allowed Bajaj Healthcare Limited to acquire GENRX Pharmaceuticals Private Limited as a going concern on a 'clean slate' basis, protecting it from past liabilities up to the liquidation commencement date.
A Bench comprising Judicial Member K. R. Saji Kumar and Technical Member Anil Raj Chellan partly allowed Bajaj Healthcare's application, granting several reliefs to facilitate the takeover while declining certain concessions that fell outside its jurisdiction.
"As a result of the above detailed discussions, we consider it appropriate to partly allow the Application as specified hereunder. For all other reliefs, concessions, or prayers which are rejected by this Tribunal, the Applicant shall be at liberty to approach the concerned authorities, if any."
The case concerns Phoenix ARC Pvt Ltd's insolvency application against GENRX. It was admitted on January 22, 2020, initiating the corporate insolvency resolution process. After the resolution plan received did not secure approval and the liquidation proposal failed to meet the prescribed voting threshold, the Tribunal ordered liquidation on January 28, 2023.
The liquidator issued a public announcement on May 2, 2023 and conducted auctions. Bajaj Healthcare participated in the e-auction held on February 20, 2025, after depositing ₹50 lakh as earnest money and emerged as the successful bidder. Following a letter of intent dated March 12, 2025, it paid the sale consideration, including interest, totalling ₹10.8878 crore on April 2, 2025. The liquidator issued the sale certificate and handed over possession on April 4, 2025.
The Tribunal observed that a going concern sale during liquidation is intended to preserve the corporate entity and enable its business to continue. It held that the successful bidder could not be burdened with the corporate debtor's past liabilities contrary to the terms of the auction.
Bajaj Healthcare was permitted to acquire GENRX on a clean slate basis from the transfer date, with relief against claims and liabilities up to the liquidation commencement date.
The Tribunal also allowed relief concerning existing charges and encumbrances, while clarifying that the buyer could not claim a better title to assets than GENRX itself possessed.
The Bench permitted restructuring of GENRX's share capital to implement the acquisition, including cancellation of existing capital and issuance of fresh equity shares, subject to the Insolvency and Bankruptcy Code.
The approved structure provides for 1,08,50,000 new equity shares of ₹10 each aggregating to ₹10.85 crore, with Bajaj Healthcare and its nominees holding the entire equity share capital.
The Tribunal also allowed reconstitution of the board of directors, subject to applicable laws and proceedings, and exempted specified procedural requirements under the Companies Act for implementing the capital restructuring.
The Tribunal granted reliefs enabling the change of bank account signatories, release of charges, access to the corporate debtor's bank shareholding records and cooperation from the liquidator, subject to the conditions recorded in the order.
However, it declined broad reliefs seeking automatic continuation or revival of licences, blanket tax benefits and a general right to approach the Tribunal over every difficulty in managing the company. Bajaj Healthcare was left free to approach the relevant authorities for reliefs falling within their jurisdiction.
The application was accordingly partly allowed with the Tribunal clarifying that reliefs not granted could be pursued before the concerned authorities, where permissible.
For Applicant : Advocates Ayush Rajani a/w Prachi Wazalwar, Shawn Fernandes, Arusha Bapat and Anurag Mishra
For Liquidator : Advocate Aniruth Purusothaman