NCLAT allows Liquidator to remove Auctioned Assets, rejects Reliance Realty's Ownership Claims and Obstruction of Sale Process [Read Order]
The NCLAT found that the Draft Agreement relied upon by the appellant was an unsigned, inchoate document, and the internal SAP records were produced without supporting invoices, making them insufficient evidence
Reliance, NCLAT allows Liquidator, Ownership Claims
Reliance, NCLAT allows Liquidator, Ownership Claims
In a recent ruling, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, dismissed an appeal by Reliance Realty Limited, upholding a National Company Law Tribunal (NCLT) order that permitted the removal of assets from leased premises. The NCLAT held that the burden of proof to establish ownership of the assets lay with the appellant.
The appeal challenged the NCLT, Mumbai Bench's order dated 06.06.2025, which had allowed the liquidator to access and dismantle movable assets from premises leased by Reliance Realty to the Corporate Debtor, Independent TV Limited. The assets had been sold to M/s. Shree Sai Baba Ship Breaking Co., the successful auction purchaser (SAP), had paid the full bid amount of Rs. 4.18 Crores.
Counsel for the appellant, Reliance Realty, contended that the liquidator had erroneously presumed that possession by the Corporate Debtor equated to ownership. They argued that the assets included items belonging to Reliance Realty and its parent company, Reliance Communications Ltd. (RCL), and relied on a Draft Agreement and internal SAP records to substantiate their claim. It was submitted that the liquidator was duty-bound to verify asset ownership before auction and that the sale was void as the liquidator could not pass better title than the Corporate Debtor possessed.
A bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member, Technical) observed that Reliance Realty had remained silent throughout the Corporate Insolvency Resolution Process (CIRP) and the subsequent liquidation proceedings, only raising an ownership claim after the auction was concluded. The Tribunal termed this 'tacit acquiescence' and noted that the burden of proof in a dispute over movable property lies with the person asserting ownership.
The NCLAT found that the Draft Agreement relied upon by the appellant was an unsigned, inchoate document, and the internal SAP records were produced without supporting invoices, making them insufficient evidence. The Tribunal emphasised that allowing the appeal at this stage would derail the concluded liquidation process, undermine the sanctity of the auction, and erode investor confidence in the insolvency regime.
The NCLAT dismissed the appeal, finding it devoid of substance. The Tribunal upheld the impugned order, allowing the liquidator and the successful auction purchaser to remove the assets from the leased premises without obstruction from Reliance Realty. No costs were imposed.
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