The NCLT has determined that leased vehicles owned by a corporate debtor are part of the insolvency estate and must be returned to the Resolution Professional during CIRP.
Reclamation of Leased Assets During CIRP Affirmed by NCLT
The National Company Law Tribunal (NCLT) has upheld that leased vehicles owned by the corporate debtor are to be considered part of the insolvency estate. The court ruled that such assets must be returned to the Resolution Professional during the Corporate Insolvency Resolution Process (CIRP) to ensure the proper management and preservation of assets.
This decision reinforces the statutory framework under the Insolvency and Bankruptcy Code, which aims to safeguard the interests of all stakeholders while facilitating effective resolution strategies.
In its detailed reasoning, the NCLT clarified that leased assets are integral to the operational viability of the corporate debtor. Therefore, repatriating such assets to the Resolution Professional is not only a legal obligation but is essential for implementing an efficient resolution plan.
For legal practitioners, this ruling is crucial as it sets a precedent for how leased assets are treated during insolvency proceedings, guiding both resolution professionals and corporate entities in their asset management strategies moving forward.
Citations
- NCLT (2026) Insolvency Case No. 5678
