Assignment of Not Readily Realisable Assets Valid for Dissolution When No Further Assets Remain for Distribution: NCLT [Read Order]

The National Company Law Tribunal (NCLT) New Delhi has held that assignment of Not Readily Realisable Assets (NRRAs) including pending avoidance transaction proceedings, would not obstruct dissolution of a Corporate Debtor where no further realisable assets remained available for distribution under the Insolvency and Bankruptcy Code, 2016 (IBC).

The Corporate Debtor had entered liquidation pursuant to an order dated November 6, 2020, after failure of the Corporate Insolvency Resolution Process initiated in a petition filed by Oriental Bank of Commerce.

During liquidation the Liquidator conducted valuation exercises, invited claims, constituted the Stakeholders Consultation Committee (SCC) and submitted regular progress reports before the Tribunal. However, it was found that apart from certain movable assets and disputed assets in the nature of avoidance transaction applications, there were no assets capable of realisation and distribution in accordance with Section 53 of the IBC.

The Liquidator submitted that the pending avoidance applications and residual financial assets were categorised as NRRAs and assigned to Bellcore Management Services Pvt. Ltd. pursuant to a resolution passed unanimously in the 9th SCC meeting held on June 16, 2025. The assignment agreement also provided for future recoveries from such assets to be distributed in accordance with Section 53 of the Code.

It was argued that since all remaining assets stood assigned and no further realisable assets survived in the liquidation estate, the Corporate Debtor had effectively undergone complete liquidation within the meaning of Section 54 of the IBC.

Accepting the submissions, the Tribunal observed that the pending avoidance application bearing IA No. 2490/2020 would thereafter be pursued by the assignee in accordance with the assignment agreement. The Bench further noted that all statutory compliances including filing of the Final Report and Form-H compliance certificate, had been fulfilled by the Liquidator.

The Bench comprising Bachu Venkat Balram Das and Ravindra Chaturvedi passed the order while allowing a dissolution application holding that no impediment survived for dissolution the NCLT allowed the application and ordered dissolution of the Corporate Debtor.

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