Insolvency : Burden of proof regarding ownership of assets lying at leased premises

Reliance Realty's Ownership Claims Dismissed in Insolvency Case. NCLAT Upholds Liquidator's Right to Remove Assets from Leased Premises in Reliance Realty Dispute

In a significant ruling on October 29, 2025, the National Company Law Appellate Tribunal (NCLAT) upheld the decision allowing the Liquidator to remove movable assets from the leased premises of Reliance Realty Limited. The judgment, delivered by the Principal Bench in New Delhi, dismissed the appeal filed by Reliance Realty Limited challenging the removal of assets claimed by Independent TV Ltd., the Corporate Debtor.

The dispute arose after Reliance Realty, the appellant, objected to the liquidation proceedings conducted by the Liquidator, Anup Kumar, on grounds that some assets belonged to them and not to the Corporate Debtor. The appellant argued that the Liquidator had failed to prove ownership of the assets, which were auctioned to M/s Shree Sai Baba Ship Breaking Company, the successful bidder.

The NCLAT, presided by Justice Ashok Bhushan and Barun Mitra, emphasized that the burden of proof regarding ownership lay with Reliance Realty, not the Liquidator. The tribunal noted that the appellant failed to substantiate its ownership claims despite ample opportunity during the Corporate Insolvency Resolution Process (CIRP) and liquidation proceedings.

The court observed that the Liquidator acted within the statutory framework of the Insolvency and Bankruptcy Code, 2016, and IBBI (Liquidation Process Regulations), 2016. It underscored that the Liquidator was duty-bound to maximize asset value and that the auction process was conducted fairly and transparently.

Reliance Realty's appeal was dismissed on grounds that it lacked substantial evidence to prove ownership, and the tribunal emphasized the importance of not disrupting the liquidation process due to belated claims. The judgment reinforces the legal precedent that ownership claims must be substantiated by those asserting them, aligning with the provisions of the Bharatiya Sakshya Adhiniyam, 2023.

The ruling allows the Liquidator and successful bidder to proceed with the asset removal without obstruction from Reliance Realty. This decision marks a significant development in insolvency law, ensuring efficient and transparent liquidation processes that prioritize value maximization for stakeholders.

Bottom Line:

Insolvency and Bankruptcy Code - Burden of proof regarding ownership of assets lying at leased premises rests on the person claiming ownership and not on the Liquidator in possession of such assets during CIRP and liquidation proceedings.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 18, 34, 35, 36; IBBI (Liquidation Process Regulations), 2016 Regulation 32A; Bharatiya Sakshya Adhiniyam, 2023

Reliance Realty Limited v. Anup Kumar, (NCLAT)(Principal Bench, New Delhi) : Law Finder Doc Id # 2800536