NCLT Mumbai: Liquidator Cannot Claim Third-Party Assets; Protects Possession of Allotted Shop in Sanghvi Land Case

April 7, 2026 : The Mumbai Bench-I of the National Company Law Tribunal has clarified that insolvency professionals cannot assume control over assets that do not belong to the corporate debtor, even if such assets appear in its records. The ruling came in Manoj Chandrakant Jagirdar v. Bank of Baroda & Anr., concerning a dispute over Shop No. 004A at Sanghvi Square Mall, Ghatkopar (West), Mumbai.

A Bench comprising Technical Member Prabhat Kumar and Judicial Member Sushil Mahadeorao Kochey held that the powers of a Resolution Professional and Liquidator under the Insolvency and Bankruptcy Code, 2016 are confined strictly to assets owned by the corporate debtor. They do not extend to third-party assets, even where such assets are reflected in the debtor’s books or administrative records.

The application was filed under Section 60(5) of the Code by Manoj Chandrakant Jagirdar, who sought exclusion of the shop from the liquidation estate of Sanghvi Land Developers Pvt. Ltd. and protection from eviction proceedings initiated by the Liquidator. The applicant claimed ownership and continuous possession since October 2012, relying on a Memorandum of Understanding dated 13 October 2012, along with an Allotment Letter and Possession Letter issued by the corporate debtor.

The Tribunal noted that the applicant’s entitlement originated from a registered Development Agreement dated 25 October 2002, under which he was to receive commercial area in the redeveloped project. It found that the allotment of Shop No. 004A formed part of this entitlement and was supported by contemporaneous documents whose authenticity had not been disputed.

Rejecting the Liquidator’s reliance on maintenance bills and tax records reflecting the corporate debtor’s name, the Bench held that such entries are merely administrative and cannot override substantive rights arising from contractual arrangements. It further observed that the Liquidator had failed to produce any cogent material to discredit the applicant’s documents or establish ownership of the shop in favour of the corporate debtor.

Significantly, the Tribunal underscored that Sections 18, 25, and 35 of the Code limit the authority of insolvency professionals to assets owned by the corporate debtor. It reiterated that insolvency proceedings cannot be used to disturb possession or rights over assets that prima facie belong to third parties.

While refraining from conclusively determining title, the Bench directed the Liquidator to refrain from taking coercive steps, including eviction, dispossession, or auction of the shop, until ownership is adjudicated by a competent forum. At the same time, liberty was granted to the Liquidator to challenge the applicant’s claim upon discovery of credible evidence.

The application was partly allowed, with the Tribunal also directing the applicant to file an appropriate claim before the Liquidator within two weeks.

Case Title: Manoj Chandrakant Jagirdar v. Bank of Baroda & Anr.
Case No.: I.A. (IBC) No. 186/MB/2025 in CP (IB) No. 7/MB/2023
Decision Date: 07 April 2026