{"id":387250,"date":"2026-06-16T14:03:42","date_gmt":"2026-06-16T08:33:42","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=387250"},"modified":"2026-06-16T14:52:29","modified_gmt":"2026-06-16T09:22:29","slug":"nclt-kolkata-holds-title-disputes-over-property-cannot-be-decided-under-section-605-ibc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/06\/16\/nclt-kolkata-holds-title-disputes-over-property-cannot-be-decided-under-section-605-ibc\/","title":{"rendered":"NCLT Kolkata Holds Title Disputes Over Property Cannot be Decided Under Section 60(5) IBC"},"content":{"rendered":"
\n

National Company Law Tribunal, Kolkata:<\/span> In the present case, an application was filed under Section 60(5)<\/a>, Insolvency and Bankruptcy Code, 2016<\/a> (IBC) read with Rule 11, National Company Law Tribunal Rules, 2016 by Karbi Anglong Autonomous Council (applicant) seeking declaration of ownership and to direct Respondent 1 (IRP) not to proceed to take any steps in connection with the disputed property. The Bench of Labh Singh (Judicial Member)<\/span> and Rekha Kantilal Shah (Technical Member)<\/span>, dismissed the application, stating that the ownership as claimed could be determined by the civil court and not by National Company Law Tribunal (NCLT) or National Company Law Appellate Tribunal (NCLAT) in exercise of its jurisdiction under Section 60(5)<\/a> IBC<\/a>. The property is standing in the name of Sis Mohan Real Estate (P) Ltd. (corporate debtor), thus IRP had rightly taken custody and control of the disputed property.<\/p>\n

Background<\/h3>\n

The applicant, vide deed of conveyance dated 5 November 2020 registered on 7 December 2020 purchased the property demised under the sale deed for a sale consideration of ₹ 7,50,00,000 from the corporate debtor.<\/p>\n

On 2 September 2023, IRP along with his representatives, came to the premises of the applicant and affixed a Form A which is the public announcement under Regulation 6, Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 , and directed vacation of the property for taking possession thereof. Upon inquiry, the applicant came to know of the order dated 31 August 2023 whereby the Tribunal had admitted the corporate debtor into corporate insolvency resolution process (CIRP) and a moratorium under Section 14<\/a> IBC<\/a> had been imposed.<\/p>\n

The applicant contended that the act of taking possession of the property, which absolutely belonged to the applicant and of which the applicant was the absolute owner, was per se illegal and contrary to law.<\/p>\n

The applicant further submitted that the said property had been purchased long before filing of the application under Sections 8<\/a> and 9<\/a> IBC<\/a> and before initiation of CIRP against the corporate debtor.<\/p>\n

The applicant further states that the corporate debtor had neither mortgaged the said property nor was Tatanagar Financial Services Ltd. (operational creditor) a financial institution. It was also submitted that the contract between the operational creditor and the corporate debtor pertained to rental of JCB’s, and there was no clause for confiscation of any property of the corporate debtor in case of breach of contract.<\/p>\n

The IRP contended that the applicant lacked locus to intervene in the insolvency proceedings and that issues relating to ownership could not be adjudicated by the Tribunal. It was further submitted that the property continued to stand in the name of the corporate debtor and had therefore been taken into custody in discharge of statutory duties under IBC.<\/p>\n

Issues<\/h3>\n
    \n
  1. \n

    Whether IRP was justified in taking custody and control of the property claimed by the applicant.<\/p>\n<\/li>\n

  2. \n

    Whether the Tribunal could grant declaratory relief regarding ownership and title over the disputed immovable property under Section 60(5)<\/a> IBC<\/a>.<\/p>\n<\/li>\n<\/ol>\n

    Analysis, Law, and Decision<\/h3>\n

    The Tribunal observed that it was an undisputed fact that the applicant had purchased the property for a consideration of ₹ 7,50,000 vide conveyance deed dated 5 November 2020 registered on 7 December 2020, prior to filing of the application under Sections 8<\/a> and 9<\/a> IBC<\/a>.<\/p>\n

    The Tribunal further noted that by the present application, the applicant was seeking declaratory relief and restoration of possession of the property in question, along with a direction to IRP not to take any steps in connection with the property in question.<\/p>\n

    The Tribunal referred to Section 18(1)(f<\/span>)(vi<\/span>)<\/a> IBC<\/a> and observed that IRP is required to take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with the information utility or the depository of securities or any other registry that records the ownership of assets.<\/p>\n

    The Tribunal relied upon the judgment in Gloster Ltd.<\/span> v. Gloster Cables Ltd.<\/span>, (2026) 264 Comp Cas 607<\/a> wherein it was held that NCLT had jurisdiction to adjudicate disputes which arose solely from or which related to the insolvency of the corporate debtor. The NCLT and NCLAT must ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora where the dispute does not arise solely from or relate to the insolvency proceedings, and that the nexus with the insolvency of the corporate debtor must exist.<\/p>\n

    The Tribunal held that the property in question was not mutated in the name of the applicant and continued to stand in the name of the corporate debtor in the revenue record. Thus, the ownership as claimed could be determined by the civil court and not by the Tribunal. Therefore, IRP had rightly taken custody and control of the property in question.<\/p>\n

    The Tribunal consequently held that the application was not maintainable and was devoid of merits and further clarified that nothing observed in the order would affect the applicant’s right to seek any alternative remedy available in law.<\/p>\n

    [Tatanagar Financial Services Ltd.<\/span> v. Sis Mohan Real Estate (P) Ltd.<\/span>, Intervention No. 06 of 2024 decided on 8-5-2026<\/span>]<\/p>\n\n

    Advocates who appeared in this case:<\/p>\n

    For Applicant:<\/span> Shaunak Mitra, Advocate<\/p>\n

    For Respondents:<\/span> Swarnendu Chatterjee, S. Auddy, Alisha Kar and Nisha Nahata, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Section 18(1)(f)(vi) IBC empowers the resolution professional to take control and custody of any asset over which the corporate debtor has ownership rights as reflected in its balance sheet, information utility, depository of securities, or any other registry recording ownership of assets, including assets subject to the determination of ownership by a court or authority.<\/p>\n","protected":false},"author":67523,"featured_media":387263,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,11],"tags":[43781,79583,107161,57315,107162,107156,62049,107155,66012,107163,107157,34025,32852,107159,107158,107160,48789],"class_list":["post-387250","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-cirp","tag-civil-court-jurisdiction","tag-custody-of-assets","tag-declaratory-relief","tag-insolvency-jurisdiction","tag-labh-singh","tag-mutation-of-property","tag-nclt-kolkata","tag-ownership-dispute","tag-ownership-dispute-under-section-605-ibc","tag-rekha-kantilal-shah","tag-resolution-professional","tag-revenue-records","tag-section-18-ibc","tag-section-605-ibc","tag-third-party-property","tag-title-dispute"],"yoast_head":"\nNCLT Kolkata: Ownership dispute over CIRP 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