Inspection of disputed property to identify liquidation assets does not adjudicate third-party title or possession rights.

The appeal challenged the order dated 9 July 2026 passed by the NCLT, Mumbai Bench in IA (IBC)/1023/MB/2025 in CP (IB) No. 93 of 2022.

The application was filed by the Liquidator seeking, inter alia, possession of a portion of premises A-2, police assistance, appointment of an independent architect/surveyor to inspect and measure the premises, and consequential reliefs.

The Corporate Debtor had entered liquidation after no resolution plan was approved, and the Respondent was appointed as Liquidator.

The Liquidator asserted that the Corporate Debtor owned premises described as A-2 (Part 2), Second Floor, Trade Square Building, Andheri-Kurla Road, Sakinaka, Mumbai, measuring 81.30 sq. metres, and that the premises formed part of the liquidation estate but were under alleged illegal encroachment by the Appellants.

The Appellants disputed the Corporate Debtor’s title and claimed ownership and possession over the entire A-2 unit, relying on prior transactions allegedly originating from Mukti Infratech Pvt. Ltd. and an Agreement to Sell executed in favour of Appellant No. 2 in 2016.

Although the Adjudicating Authority observed that disputed questions of ownership and possession ordinarily fell within the jurisdiction of a civil court, it directed inspection and measurement of the premises to identify and segregate the portion allegedly belonging to the Corporate Debtor and forming part of the liquidation estate.

Whether the Adjudicating Authority, exercising jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, could direct inspection and measurement of immovable property where the parties disputed title and possession.

Whether the direction for inspection and measurement unlawfully adjudicated or prejudiced the Appellants’ ownership and possessory rights over the A-2 premises.

Whether the appeal against the inspection and measurement direction was premature.

Section 60(5) of the Insolvency and Bankruptcy Code, 2016 confers residuary jurisdiction on the Adjudicating Authority over questions of law or fact arising out of or in relation to insolvency resolution or liquidation proceedings; however, that jurisdiction cannot ordinarily be used to finally adjudicate complex and disputed questions of title and possession of immovable property between third parties.

The liquidation process extends to property forming part of the corporate debtor’s liquidation estate, and the Liquidator may take steps in accordance with law to identify, secure and realise such property.

The Appellants relied on SICOM Ltd. v. Kitply Industries Ltd. & Anr., Comp. App. (AT) (Ins.) No. 849 of 2021, particularly paragraph 69, to contend that the Adjudicating Authority could not exceed its insolvency jurisdiction by determining disputed property rights.

The applicable distinction was between a preliminary inspection intended to identify property forming part of the liquidation estate and a final adjudication of title or possession.

The NCLAT held that the impugned order did not finally determine the Appellants’ title or possessory rights.

The Adjudicating Authority had identified discrepancies between the sanctioned floor plan, maintenance receipts, bills and contractual areas reflected in the documents relied upon by the parties.

It also noted that the relevant office appeared to have been sold in parts, that the cumulative area claimed by the Appellants exceeded the allotted area, and that the property may have been sold twice.

In those circumstances, inspection and measurement were considered necessary to determine whether a portion of the premises belonged to the Corporate Debtor and formed part of the liquidation estate.

The direction was therefore ancillary to the Liquidator’s statutory duties and was not, by itself, an adjudication of ownership or possession.

Any subsequent action by the Liquidator was required to be taken in accordance with law, leaving the parties’ substantive title and possessory claims unaffected.

Accordingly, the challenge was premature.

It held that the impugned order did not affect the Appellants’ ownership or possessory rights and merely enabled identification and segregation of property allegedly forming part of the liquidation estate.

There was no order as to costs, and all pending interlocutory applications were disposed of.