The NCLAT has confirmed that a Resolution Professional (RP) is authorized to recover assets of a corporate debtor from unauthorized occupants without the need to file a civil suit, streamlining asset recovery under the Insolvency and Bankruptcy Code.
NCLAT on RP's Authority
The National Company Law Appellate Tribunal (NCLAT) has reaffirmed the authority of Resolution Professionals (RPs) to reclaim corporate debtor's assets from unauthorized occupants without resorting to civil litigation. This clarification strengthens the RP's role within the ambit of the Insolvency and Bankruptcy Code (IBC).
The tribunal emphasized that the mechanisms established under the IBC are sufficient for an RP to act decisively against unauthorized occupants. It noted that the predictability and efficiency of asset recovery processes are crucial to the overall integrity of insolvency proceedings.
This ruling is significant for practitioners, as it clarifies the latitude RPs possess in asset recovery. It enhances the operational efficacy of representing corporate debtors or RPs during insolvency processes.
Citations
- NCLAT (2026) NCLAT 3
