The NCLAT has affirmed that a Resolution Professional can recover corporate debtor’s assets from unauthorized occupants without resorting to a civil suit. This ruling enhances the efficacy of the insolvency resolution process.
NCLAT Enhances Recovery Powers of Resolution Professionals
The NCLAT has provided clarity on the authority of Resolution Professionals (RPs) in its latest ruling, stating that they can recover the corporate debtor’s assets from unauthorized occupants without the need to initiate a separate civil suit. This ruling streamlines the insolvency resolution process under the IBC and underscores the powers of RPs in managing corporate assets during proceedings.
In making this determination, the NCLAT noted the necessity for RPs to act swiftly to reclaim assets essential for the corporate resolution process. The tribunal emphasized that allowing RPs to recover assets directly enhances the efficiency of the insolvency resolution framework and protects the interests of creditors.
This order is of significant importance to practitioners, as it allows RPs to operate more flexibly in recovering assets. Legal advisers should now be aware of the expanded powers granted to RPs, which may reduce delays associated with the recovery of assets and improve outcomes for creditors in corporate insolvency scenarios.
Citations
- NCLAT Order (2026) 1 NCLT 4
