CIRP - Validity of deed of assignment of lease - Authority of RP ...

Insolvency and Bankruptcy

April 25, 2024

CIRP - Validity of deed of assignment of lease - Authority of RP to Issue Inspection Notice - The Tribunal found that there was a significant dispute regarding the assignment of the lease to the corporate debtor. The absence of written intimation to the appellant about the assignment was a critical point, leading to the conclusion that the appellant was not adequately informed and that the alleged assignment was therefore disputed. - The Appellate Tribunal noted that while the RP has broad powers to manage and preserve the assets of the corporate debtor, these powers do not extend to properties over which the debtor has no legitimate claim or possession. Since the lease had expired and there was no valid assignment, the property did not constitute a part of the corporate debtor’s estate. - The NCLAT set aside the lower court’s decision, directing the RP to withdraw the notice for inspection and cease any dealings with the property.

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