The NCLAT Delhi has, by a 2:1 majority, upheld a corporate debtor's existing easementary right of way during the liquidation process, affirming the NCLT's jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code (IBC). This ruling emphasizes the significance of maintaining pre-existing rights in corporate insolvency scenarios.
NCLAT Upholds Easementary Right of Way During IBC Liquidation
The National Company Law Appellate Tribunal (NCLAT) in Delhi has upheld, by a 2:1 majority, the existing easementary right of way of a corporate debtor amidst liquidation proceedings. The Tribunal affirmed that the National Company Law Tribunal (NCLT) retains jurisdiction over post-Corporate Insolvency Resolution Process (CIRP) obstructions, particularly those that may affect the value of liquidation assets under Section 60(5)(c) of the Insolvency and Bankruptcy Code (IBC).
In its ruling, the NCLAT highlighted that the right of way is critical to maintaining the commercial viability of assets under liquidation. The majority opinion articulated that such rights must be safeguarded as they improve the potential asset value during insolvency, thus benefiting creditors. The judgment underscored statutory provisions that protect existing rights which are crucial in preserving asset integrity.
This ruling sets a precedent for how easement rights are treated in future insolvency proceedings. Legal practitioners should take note of this decision, as it reinforces the importance of asserting and maintaining such rights before, during, and after insolvency processes. Ensuring that pre-existing rights are recognized can significantly influence asset valuations in liquidation scenarios.
Citations
- NCLAT Delhi (2026) Upcoming Volume Reporter Page