The NCLAT has clarified that the NCLT does not possess the jurisdiction to adjudicate on disputed easementary rights concerning third-party land under the IBC, thereby protecting liquidation assets and creditor interests.
NCLAT Clarifies Jurisdiction Over Easement Rights
The NCLAT has ruled that the National Company Law Tribunal (NCLT) lacks the jurisdiction to decide on disputed easementary rights related to third-party properties under the Insolvency and Bankruptcy Code (IBC). This decision reinforces the boundaries of the insolvency jurisdiction and focuses on protecting assets and ensuring that creditors' interests are prioritized during insolvency proceedings.
The ruling was prompted by concerns that allowing the NCLT to adjudicate on such rights could jeopardize the integrity of liquidation processes, as it may hinder access to assets essential for satisfying creditor claims. The Tribunal's position emphasizes the need for a sound understanding of jurisdictional limits in insolvency proceedings.
For practitioners, this ruling serves as a reminder of the importance of jurisdictional clarity when navigating insolvency cases. Legal counsel should exercise caution and ensure that disputes regarding easementary rights are directed to the appropriate forums, avoiding potential complications in the insolvency procedure.
Citations
- NCLAT Order (2026) Volume Reporter Page
