The National Company Law Appellate Tribunal's (NCLAT) recent decision upholding the liquidation of Independent TV Ltd. marks a significant reaffirmation of one of the Insolvency and Bankruptcy Code's (IBC) core principles time-bound resolution. In dismissing Reliance Realty Ltd.'s appeal and directing that liquidation be completed “in the shortest possible time,” the NCLAT has sent a strong signal to stakeholders: liquidation is not to be stalled by belated claims or procedural manoeuvres.
Background: From Lease to Liquidation
The dispute traces back to 2017, when Reliance Realty leased a portion of its Dhirubhai Ambani Knowledge City (DAKC) premises to Independent TV for operating its direct-to-home (DTH) services. Payments reportedly stopped after October 2018, leading to financial distress and eventual initiation of the Corporate Insolvency Resolution Process (CIRP) in February 2020. With no viable resolution plan emerging, the National Company Law Tribunal (NCLT), Mumbai Bench, ordered liquidation of the company in March 2023. During the liquidation, the liquidator handed over assets — reportedly numbering over 1,800 items to the successful bidder, Shree Sai Baba Ship Breaking Company. At this stage, Reliance Realty raised objections, claiming unpaid rent, electricity dues, and ownership rights over certain assets located within its leased premises. It also sought to restrict the liquidator's access until its dues were cleared. The NCLAT, however, rejected these pleas, affirming that such disputes cannot derail liquidation proceedings already underway.
Time-Bound Liquidation as a Cornerstone of IBC
The NCLAT's insistence on completing liquidation “in the shortest possible time” resonates with the IBC's legislative intent. One of the key objectives of the Code is to ensure prompt resolution or closure of insolvent entities, preventing value erosion and uncertainty. When landlords or related parties seek to obstruct or delay access to the liquidator, it runs contrary to this principle. The appellate tribunal made an important observation Reliance Realty had failed to assert its ownership or asset claims during the CIRP stage. Raising such issues only at the liquidation phase, after bidders had been identified and assets inventoried, was seen as an afterthought intended to delay proceedings. By refusing to entertain such late-stage claims, the NCLAT reinforced the sanctity of the IBC's procedural timelines.
Leased Premises and Asset Control Challenges
This case highlights one of the more complex issues in insolvency administration the treatment of assets located on leased premises. While the premises themselves may belong to a lessor, movable assets within them can form part of the corporate debtor's estate. The NCLAT clarified that the lessor's rental and service claims are distinct from ownership rights and cannot be used to obstruct liquidation. For insolvency practitioners, this serves as a reminder that asset control during liquidation must remain with the liquidator. Lessors must raise rental claims through proper channels, but they cannot bar access to or seizure of movable assets forming part of liquidation inventory. The decision also reiterates the importance of timely participation landlords or related entities who fail to contest ownership during CIRP risk forfeiting the opportunity to do so later.
Inter-Company Complexities and Delayed Claims
Adding another layer to the dispute was the corporate structure itself. Reliance Realty is a step-down subsidiary of Reliance Communications (RCom), which is separately undergoing liquidation. The NCLAT observed that if ownership of certain assets truly rested with RCom, the appropriate entity to contest would have been the parent company's liquidator — not Reliance Realty. Since Reliance Realty's role was limited to that of a lessor, its late claims were deemed untenable. This finding underscores a recurring challenge in Indian insolvency practice: interlinked corporate groups with overlapping asset pools and internal lease arrangements. The case exemplifies how such structures can lead to confusion and delay, unless related entities assert their claims promptly and through the proper insolvency forum.
Policy Reflections: Strengthening Procedural Discipline
The decision carries important implications for insolvency jurisprudence and policy. First, it reaffirms that liquidation cannot become a new battleground for late ownership disputes. Once liquidation begins, the focus must remain on asset realisation and creditor distribution not on reopening settled issues. Second, it spotlights the need for greater clarity in documenting ownership of assets located in leased or shared facilities. Regulators such as the Insolvency and Bankruptcy Board of India (IBBI) could consider issuing guidelines to pre-empt such conflicts, including mandatory asset-mapping during the CIRP stage. Third, the ruling cautions against the misuse of landlord rights to delay liquidation. While lessors retain legitimate remedies under lease law, they cannot use those remedies to obstruct access or impede the liquidator's control. The judiciary's firm stance ensures predictability and trust in the insolvency process both essential for investor confidence and market stability.
A Case that Reinforces the Code's Spirit
The Reliance Realty–Independent TV case may not introduce a new principle, but it reinforces the procedural integrity of the IBC framework. It sends a clear message to all stakeholders that insolvency and liquidation processes must not be derailed by late claims or internal corporate disputes. For landlords, related parties, and insolvency professionals alike, the lesson is straightforward: act early, document clearly, and respect the Code's timelines. As India's insolvency ecosystem continues to mature, the discipline of adhering to time-bound procedures will determine its effectiveness. The NCLAT's decision thus stands as a timely reminder that efficiency, certainty, and accountability remain the pillars upon which the IBC's success ultimately rests.
Author is Assistant Professor, School of Law, UPES Dehradun. Views Are Personal.