Adjudicating Authority lacks jurisdiction to determine property title disputes pending before a competent civil forum.

In brief

The question

1. Whether the Adjudicating Authority has the jurisdiction to adjudicate upon complex title disputes of immovable property that are already pending before a civil court

The court held

The NCLAT dismissed the appeal, holding that the Adjudicating Authority did not err in rejecting the applications for exclusion of the property

It also directed

The court affirmed that the rights of the parties regarding the property shall be governed by the ultimate decision in the pending litigation before the Delhi High Court, to which the SRA is bound

The appeal was dismissed with these observations

01Facts

The Appellant challenged an order dated 19/02/2026 passed by the Adjudicating Authority (NCLT) in I.A. 1290/2025 and I.A. 2626/2024

¶ 2

The Appellant sought the exclusion of a property in Chhatarpur, Delhi, from the Corporate Debtor's (CD) assets, claiming the Resolution Professional (RP) had illegally taken symbolic possession despite the property not being listed in the CD's balance sheet and revenue records (Jamabandi) reflecting the Appellant’s name

¶ 3-6

The title of the property was already sub judice before the Delhi High Court in CS (OS) No. 1948 of 2015

¶ 6, 11

The Adjudicating Authority rejected the exclusion applications, leading to this appeal

¶ 5

02Issues

i.1. Whether the Adjudicating Authority has the jurisdiction to adjudicate upon complex title disputes of immovable property that are already pending before a civil court

¶ 9

ii.2. Whether a disputed property must be excluded from a Resolution Plan if the plan incorporates a clause binding the Successful Resolution Applicant (SRA) to the outcome of pending civil litigation

¶ 9-10

03Law Applied

the jurisdictional limits of the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC), noting that it cannot adjudicate ownership disputes already sub judice before a competent civil forum

¶ 9

Section 30(5) of the IBC regarding the approval of a Resolution Plan by the Committee of Creditors (CoC) and the principle that a Resolution Plan may legitimately provide for the continuation of pending litigation by the SRA, who shall be bound by the final judicial outcome

¶ 9-10

Provisions in the judgment · 1 · Linked ones open on LawLens

Insolvency and Bankruptcy Code, 2016. Section 30

04Reasoning

The NCLAT observed that the Adjudicating Authority correctly identified that the ownership dispute regarding the Chhatarpur property required determination by a civil forum rather than an insolvency court

¶ 9

The Tribunal noted that the Resolution Plan, approved by the CoC and pending approval before the NCLT, explicitly recorded the pendency of the suit in the Delhi High Court

¶ 9

The court found that the Appellant’s interests were "amply protected" because the SRA had undertaken to pursue the litigation and abide by its final outcome

¶ 10

Consequently, there was no error in refusing to exclude the property from the plan, as the eventual management and control by the SRA remain subject to the High Court’s decision

¶ 10

05Holding

The NCLAT dismissed the appeal, holding that the Adjudicating Authority did not err in rejecting the applications for exclusion of the property

¶ 10, 12

The court affirmed that the rights of the parties regarding the property shall be governed by the ultimate decision in the pending litigation before the Delhi High Court, to which the SRA is bound

¶ 10

The appeal was dismissed with these observations

¶ 13

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