NCLT 03.12.2025 : The Hyderabad Bench of the National Company Law Tribunal (NCLT) has held Rajendra Prasad Tak, former liquidator of KVK Nilachal Power Pvt. Ltd., guilty of civil contempt for wilfully disobeying binding directions of the Tribunal relating to third-party equipment excluded from the liquidation estate.
The ruling was delivered by a coram comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri while allowing a contempt application filed by Teknow Overseas Private Limited.
KVK Nilachal Power entered insolvency proceedings in September 2019 on a petition filed by Power Finance Corporation Ltd.. Following a decision of the Committee of Creditors, the company was ordered into liquidation in December 2020, with Rajendra Prasad Tak appointed as liquidator.
The dispute centred on specialised slipform equipment owned by Teknow Overseas, deployed at the project site in Odisha for chimney construction. Construction activity had been halted in 2012 following directions of the Orissa High Court, leaving the equipment stranded at site.
During liquidation, Teknow approached the NCLT seeking permission to dismantle and remove its machinery. By an order dated December 3, 2021, the Tribunal categorically held that the equipment did not form part of the liquidation estate and directed the liquidator to cooperate in its removal and handover.
However, Teknow later complained that the liquidator failed to comply with the order and instead proceeded with the e-auction of the corporate debtor in 2022 without disclosing the existence of third-party equipment. This omission enabled the auction purchaser to claim ownership over assets that had already been judicially recognised as belonging to Teknow.
After examining the record, the Bench found that the liquidator was fully aware of the December 2021 order but consciously chose not to act upon it. The Tribunal noted that he neither ensured removal of the contractor’s machinery before issuing the e-auction process information document nor disclosed its presence to bidders at any stage.
Terming the conduct a conscious disregard of binding judicial directions, the Tribunal held that it squarely satisfied the requirement of wilful disobedience under Section 2(b) of the Contempt of Courts Act, 1971.
Rejecting the defence based on “as is where is” and “no recourse” auction conditions, the Bench reiterated that a liquidation estate under the Insolvency and Bankruptcy Code cannot include assets that do not belong to the corporate debtor. It clarified that no auction condition can confer title over third-party property and that bidders acquire only those assets which the corporate debtor lawfully owns.
The Tribunal consequently held the former liquidator guilty of civil contempt and directed him to appear in person on March 18, 2026, to explain why action should not be taken against him under the Contempt of Courts Act. It also directed the successful bidder, Orissa Thermal Energy Limited, to immediately permit and facilitate dismantling and retrieval of Teknow’s equipment. Both the substantive application and the contempt application were allowed.
Appearances
For the Applicant: Advocate Krishna Manohar
For the Liquidator: Advocates Abhishek Anand and Karan Kohli
For the Successful Bidder: Advocate Vinitha Reddy
Case Title: Teknow Overseas Pvt. Ltd. vs Orissa Thermal Energy Ltd. & Rajendra Prasad Tak
Case Number: IA (IBC) No. 933/2024 in IA (IBC) No. 865/2020
Coram: Judicial Member Rajeev Bhardwaj, Technical Member Sanjay Puri
