Regulations 27. Mode of sale.—

(1) The bankruptcy trustee shall ordinarily sell the assets of the bankrupt through an auction as specified in Part A of Schedule II.

(2) The bankruptcy trustee may sell the assets by private sale, in the manner specified in Part B of Schedule II if-

• (a) the asset is perishable in nature;
• (b) the value of the asset is likely to deteriorate significantly if the sale is delayed; or
• (c) the selling price of the asset is higher than the reserve price of a failed auction.

(3) The following persons shall not purchase or acquire any interest in the property of bankrupt, directly or indirectly, without permission of the Adjudicating Authority–

• (a) the bankruptcy trustee or any partner or director of the insolvency professional entity of which the bankruptcy trustee is a partner or director;
• (b) any professional appointed by the bankruptcy trustee for the bankruptcy process;
• (c) any creditor or associate of the bankrupt; and
• (d) any company where the bankrupt or a creditor is a promoter or director.

(4) The bankruptcy trustee shall not proceed with a sale, if he has reason to believe that there is any collusion amongst any one or more of the following persons: –

• (a) the buyers;
• (b) the bankrupt;
• (c) the creditors;
• (d) associates of the bankrupt or creditors;
• (e) the corporate debtor; or
• (f) related party of the corporate debtor, and shall submit a report to the Adjudicating Authority for appropriate orders.