Back
2025 Supreme(Online)(NCLT) 4832
NATIONAL COMPANY LAW TRIBUNAL
SH. PRAVEEN GUPTA, SH. ASHISH VERMA, JJ
M/S LML LTD – Appellant
Versus
UPSIDA – Respondent
CP (IB) No.55/ALD/2017
For the Applicant in IA No.485/2023, IA No.367/2024 & IA No.502/2024: Sh. Babita Jain
For the Liquidator: Sh. Shubham Agarwal
For UPSIDA: Sh. Ashish Mishra, Proxy: Sh. Rahul Kumar
The court allowed the disclaimer of onerous assets under Regulation 10, affirming the treatment of unprofitable shares as unsaleable and a financial burden.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 10 - Liquidation proceedings - Application for delay condonation - The application to condone delay in filing was allowed as the reasons for the delay were justified and the assets were deemed unsalable. (Paras 3, 5)
(B) Disclaimer of Onerous Property - Regulation 10 of the Liquidation Regulations - The court ruled that the shares from Reliance Capital Ltd. and VCCL Ltd. were treated as onerous and not viable for sale due to negative book values and suspended trading status. (Paras 3, 5)
Facts of the case:
M/S LML Ltd. was undergoing liquidation and sought to disclaim shares from VCCL Ltd. and Reliance Capital Ltd. as onerous assets due to their unsaleability and associated costs.
Findings of Court:
The court found the assets to be onerous and allowed the disclaimer under established regulations regarding liquidation.
Issues: The court examined the justification for the belated application for disclaimer of onerous assets and whether the assets could be declared as such.
Ratio Decidendi: The court affirmed that the provisions of Regulation 10 permit the disclaimer of unsaleable assets that pose a financial burden on the liquidation estate.
Result: The application for disclaimer was allowed, treating the shares as onerous.
DIVISION BENCH ITEM NO.117 NATIONAL COMPANY LAW TRIBUNAL
ALLAHABAD BENCH
PRAYAGRAJ
IA No.485/2023, IA No.367/2024, IA No.502/2024, IA No.496/2024 &
IA No.573/2024 IN CP (IB) No.55/ALD/2017
CORAM:
1. SH. PRAVEEN GUPTA,
HON’BLE MEMBER (JUDICIAL)
2. SH. ASHISH VERMA,
HON’BLE MEMBER (TECHNICAL)
Date of Order: 20th August, 2025
Attendance-Cum-Order Sheet of the Hearing.
NAME OF THE COMPANY M/S LML LTD
UNDER SECTION 10 IBC (IN LIQUIDATION)
COUNSEL APPEARED THROUGH PHYSICAL/ VIRTUAL HEARING:
Sh. Babita Jain, Adv. : For the Applicant in IA No.485/2023,
IA No.367/2024 & IA No.502/2024
Sh. Shubham Agarwal, Adv. : For the Liquidator
Sh. Ashish Mishra, Proxy for : For the UPSIDA
Sh. Rahul Kumar, Adv.
ORDER
IA No.485/2023
1. Ld. Proxy Counsel, Sh. Ashish Mishra appearing for the Respondent No.1,
namely UPSIDA states that the Ld. Arguing Counsel is not available today,
and therefore he seeks a short accommodation in this matter.
2. In view of the prayer so made, let this matter be adjourned for further hearing
on 01st September, 2025, to come up higher on the Board.
IA No.573/2024
1. This application has been filed for seeking delay condonation in filing of the
IA No.496/2024. As per Regulation 10, any application filed for seeking disclaimer to the onerous assets of the liquidation estate has to be filed within
a period of six months.
2. However, the Ld. Counsel representing the Applicant submits that the said
application has been filed belatedly beyond six months’ period due the onerous circumstances, and therefore he submits that the reasons for moving the present application beyond the prescribed period of six months are that the initial efforts have been made for sale of these two assets, namely the VCCL Ltd. and Reliance Capital Ltd. However, since any sale could not be affected and the assets were declared onerous assets as per the SCC meeting held on 17.04.2024, therefore this application was decided to be filed.
3. In view of the averments and the submissions made by the Ld. Counsel representing the Applicant, the application is allowed and the delay in filing in IA No.496/2024 is condoned.
4. Accordingly, IA No.573/2024 stands disposed off.
IA No.496/2024
1. This application has been filed inter alia seeking following prayers:
PRAYER In view of the aforesaid facts, circumstances and submissions, it is most respectfully prayed that this Hon’ble Adjudicating Authority may kindly be pleased to:
1. Disclaim the following shares held by the Applicant as onerous property.
S. No. Details of Listed/Unlisted No. of Equity Sold/Unsold Shares Shares
1. VCCL Ltd. Unlisted 15,36,000 shares Unsold comprising 32% equity shares in VCCL Ltd.
2. Reliance Listed 109 Shares Unsold Capital Ltd.
2. Pass any other order/order(s) as this Hon'ble Adjudicating Authority may deem fit.
2. It has been averred in the application that there are two assets of the Corporate Debtor i.e. the shares of the VCCL Ltd. & Reliance Capital Ltd. The details of which have been furnished at Page Nos.15 & 16 of the paper book. He submits that insofar as the shares of the VCCL Ltd. are concerned, -Sd- -Sd-
it is at present unlisted, and therefore unsalable.
3. It has further been averred by way of supplementary affidavit filed vide Diary No.680 dated 16th April, 2025 that the Reliance Capital Ltd. has present value of Rs.11.79/-. In view thereof, he submits that these assets have become onerous assets which cannot be sold off as a part of the liquidation estate inviting no proceeds/consideration. Even the cost in disposing of these two assets would be much more than the realisable value of the assets itself. Therefore, it will result into negative impact if any attempt is made for sale of these two assets. The details of the pricing have been given at Page No.4 of the aforesaid supplementary affidavit which reads as under:
Detail of the book value and the present value of the shares unsold Notes: 1. Share in Reliance Capital Ltd.: The trading of the shares of Reliance Capital Ltd. is suspended by the Recognized Stock Ex
