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In summary, Section 19 of the IBC is the primary statutory section in NCLT proceedings where respondents can be asked to disclose assets, including full asset and liability details, during insolvency, CIRP, or liquidation processes ["Divyesh DesaiResolution Professional Of GPT Steel Industries Limited VS Gujarat Industrial Development Corporation - National Company Law Tribunal"], ["National Sewing Thread Co. Ltd. VS Superintending Engineer - Madras"].
Analysis and Conclusion
In the high-stakes world of corporate insolvency and disputes before the National Company Law Tribunal (NCLT), transparency is key. Creditors, petitioners, and regulators often seek to uncover hidden assets to prevent dissipation and ensure fair recovery. A common query arises: in which section in NCLT cases can a respondent be asked to disclose assets? This question is critical for businesses navigating liquidation, mismanagement claims, or statutory dues recovery.
This blog post delves into the primary legal provisions, judicial precedents, and practical applications, drawing from established case law. While this provides general insights, it is not legal advice—consult a qualified professional for specific cases.
The cornerstone for asset disclosure in NCLT proceedings is Section 75A of the Companies Act, 2013. This section empowers courts and tribunals, including the NCLT, to direct companies and related entities to disclose their assets and liabilities. It is particularly invoked in scenarios involving non-compliance, mismanagement, or to facilitate liquidation and recovery of dues. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 548
Under Section 75A, the NCLT can order comprehensive revelations, including details on bank accounts, properties, shareholders, and affiliates. This prevents asset stripping and promotes transparency, as courts have restrained entities from dealing with assets pending proceedings. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 548
The court ordered the disclosure of various company information and restrained the companies from dealing with their assets... The court also directed the disclosure of any associated or subsidiary companies and extended the date for receiving claims from creditors/depositors. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 548
Indian courts have consistently upheld the NCLT's authority to mandate asset disclosure, reinforcing statutory provisions with inherent judicial powers.
In this case, the court directed companies and group entities to disclose extensive asset information to address liquidation and statutory compliance issues. The order emphasized preventing concealment, extending to affiliates and restraining asset dealings. This precedent directly applies to NCLT benches handling similar corporate disputes. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 548
Similarly, here the court mandated comprehensive disclosure of company assets, shareholders, and related entities. Transparency was prioritized, with restraints on asset transactions during proceedings. These rulings illustrate how NCLT can invoke Section 75A or analogous powers in insolvency matters. National Investors Forum VS Golden Forests (I) Ltd. - 2005 0 Supreme(SC) 1627
The court ordered comprehensive disclosure of company assets, shareholders, and related entities, emphasizing the importance of transparency and restraining companies from dealing with their assets during proceedings. National Investors Forum VS Golden Forests (I) Ltd. - 2005 0 Supreme(SC) 1627
While Section 75A is central to Companies Act proceedings, analogous principles appear in other areas influencing NCLT cases:
The court established that in money recovery suits, defendants may be required to disclose their assets on oath even before the settlement of issues, as a measure to secure potential decrees... Alfredo Fernandes VS Alex Camilo Rodrigues - 2024 Supreme(Bom) 540
Insolvency and Bankruptcy Code (IBC) Overlaps: Though IBC moratoriums (e.g., Section 14) restrict asset sales, NCLT directions for disclosure persist in liquidation or resolution processes. Cases like Sun Pharmaceuticals Industries Ltd. VS State Bank of India - 2019 Supreme(Cal) 476 highlight moratorium impacts but affirm tribunal oversight on assets. Sun Pharmaceuticals Industries Ltd. VS State Bank of India - 2019 Supreme(Cal) 476
Arbitration and Recovery Contexts: Courts have ordered asset lists in enforcement scenarios, as in KLA Const Technologies Pvt. Ltd. VS Embassy Of Islamic Republic Of Afghanistan - 2021 Supreme(Del) 1412, directing respondents to disclose all India-held assets via affidavits. This mirrors NCLT practices under inherent powers. KLA Const Technologies Pvt. Ltd. VS Embassy Of Islamic Republic Of Afghanistan - 2021 Supreme(Del) 1412
These sources underscore a judicial trend: tribunals like NCLT prioritize disclosure to avert prejudice, especially suspecting dissipation.
In NCLT cases—spanning insolvency (IBC), oppression-mismanagement (Sections 241-246, Companies Act), or liquidation—respondents (companies, directors, guarantors) may be directed to disclose assets when:- Asset concealment is alleged.- Recovery of statutory dues or creditor claims is at stake.- Proceedings under Section 75A or IBC liquidation (Section 35) are invoked.
NCLT derives authority from both specific provisions and general jurisdiction to prevent abuse. For instance, in corporate debtor insolvencies, liquidators or resolution professionals often seek such orders. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 548National Investors Forum VS Golden Forests (I) Ltd. - 2005 0 Supreme(SC) 1627
Petitioners should plead facts suggesting dissipation, supported by evidence, to secure directions. Respondents must comply fully, as non-disclosure risks contempt, as seen in cases where courts noted, Orders to disclose all assets have to be complied in full. State Bank of India VS Kingfisher Airlines Ltd. - 2017 6 Supreme 626
Disclosures aren't absolute:- Privacy Concerns: Personal assets of individuals may be shielded unless public interest overrides, especially in corporate contexts.- Confidentiality: Sensitive commercial data might warrant redactions.- Jurisdictional Bars: IBC moratoriums limit actions but not disclosure orders. Sun Pharmaceuticals Industries Ltd. VS State Bank of India - 2019 Supreme(Cal) 476
Courts balance these, typically favoring transparency in insolvency to aid creditors.
In NCLT, proactive disclosure can expedite resolutions under Section 230 compromises. Ad. (CA) V. Venkata Siva Kumar VS Insolvency and Bankruptcy Board of India (IBBI), Represented by Mr. Rajesh Kumar, General Manager - 2023 Supreme(Mad) 3261
Navigating NCLT requires vigilance on asset trails. This overview highlights general practices; outcomes vary by facts. Always seek tailored legal counsel.
References:1. Manish Khera VS Jayajit Trust, through its trustees Chetan Javeri & Rupesh Mehta - 2022 0 Supreme(Bom) 5482. National Investors Forum VS Golden Forests (I) Ltd. - 2005 0 Supreme(SC) 16273. Alfredo Fernandes VS Alex Camilo Rodrigues - 2024 Supreme(Bom) 5404. State Bank of India VS Kingfisher Airlines Ltd. - 2017 6 Supreme 626
Note: This is informational content based on cited judgments. Not legal advice.
#NCLT #AssetDisclosure #InsolvencyLaw
The issue involved in the present Petition is that the Application filed by the Petitioners/Plaintiffs under Sec. 151 of CPC, seeking directions from the Court against the Defendants to disclose their assets, is rejected. ... On the other hand, even if the Defendants are directed to disclose the assets on oath, no prejudice is going to be caused to them. ... Zaveri appearing for the Petitioners would submit that the Plaintiffs filed a suit for recovery of money against the Defendants and during the pend....
The NCLT shall pass appropriate orders to secure the assets. Until the NCLT passes appropriate orders regarding securing the assets, SBI and PNB shall bear the expenses of the security agencies. 24. ... The Company has movable and immovable assets. The movable assets of the Company included the assets within the office premises and machinery, rigs at various locations. The submission being made today by ld. ... The OL was asked to verify the status o....
He is directed to take over all the assets, books of accounts and records of the respondent company forthwith. ... The Official Liquidator to take all further steps that may be necessary in this regard to protect the premises and assets of the respondent-company." 4. ... The Official Liquidator shall also endeavour to prepare a complete inventory of all the assets of the respondent-company when the same are taken over; and the premises in which they are kept shall be sealed by him. .......
Learned Counsel then submitted that Sec. 14 of the IBC is not a complete bar to the sale of assets of the company in question. It is true that moratorium was declared by NCLT under Sec. 14 of IBC by its order dated 7 April, 2017. ... By its order dated 7 April, 2017 the NCLT had admitted the application of GNRE and had, in terms of Sec. 14 of the IBC, declared a moratorium in respect of sale/disposal of the assets of GNRE. The suppression of this very material fact am....
The defendant no.1 says that the Learned Adjudicating Authority (NCLT), Kolkata Bench, NCLAT New Delhi and the Hon’ble Supreme Court has held that the wind mill assets were not part of the assets of the borrower/ GNCL as the Sale Agreement in favour of the plaintiffs was finalized before commencement ... Today, the situation is that unless the Liquidator sells the windmill assets, the Liquidator cannot proceed, Mr. Chowdhury submitted.” 12. ... Arun Kumar Jagatramka, to the shareholders of GNCL, stating that for the com....
The order passed on 17.11.2021 relates to the inclusion of Rayagada assets in the valuation of the assets of the CD and to file a fresh asset memo. ... , and that he was under a direction from the NCLT to explore the possibility of a compromise under Sec.230 of the Companies Act, 2013. ... d) The 1st Respondent has authorised the investigating authority to investigate into the complaint preferred by the 3rd respondent. But it failed to note that the allegation relates to a matter pend....
, and that he was under a direction from the NCLT to explore the possibility of a compromise under Sec.230 of the Companies Act, 2013. ... But it failed to note that the allegation relates to a matter pending before the NCLT, and hence IBC will not apply. That precisely was the reason why the second respondent chose to dismiss the complaint preferred by the 3rd respondent. ... The order passed on 17.11.2021 relates to the inclusion of Rayagada assets in the valuation of the a....
Mr Shah, the learned Counsel for the Petitioner, submitted that there is ample material to suggest that the 2nd Respondent put up the 3rd Respondent only to stall the proceedings initiated by the Petitioner under the Securitisation and Reconstruction of Financial Assets and Enforcement ... Mahendra Kumar Jajodia, (2022) 233 Company Cases 36 to submit that even where an application under Section 9 of IBC filed by any operational creditor was not pending before the NCLT, still, it is the NCLT#HL....
I & II and the administrative order passed by Hon’ble President, NCLT on 06.06.2024 & 10.02.2025. In this case a Notice dated 16.08.2024 was received by NCLT on 31.08.2024 since NCLT was respondent No. 1. ... The perusal of Hon’ble High Court of Gujarat dated 16.10.2025 reveals that, thereby, there was no objection even for respondent No. 1- NCLT. The reply affidavit filed on behalf of NCLT does not find a mention in the Court proceedings at all. ... In paragraph 2 of....
Vide the said order the Court had also given directions to the Respondent to disclose certain details. ... A conjoint reading of Rule 5 of the notification dated 7th December, 2016 along with the aforementioned judgment would show that in cases where the petition is not at an advanced stage, and in cases where the Respondent has not been served till date, the matter is to be transferred to the NCLT. ... the respondent company, along with full particulars thereof suffi....
The third respondent is bound to disclose the related parties transaction in respect of the assets acquired. Further the second and third respondents have defrauded the Registration Department by undervaluing the property and by paying less stamp charges. Further the third respondent has gone beyond the scope of the registered power of attorney by selling the undivided share of property of the Petitioner without the knowledge of the principal and that the said power was executed only for a limited purpose for getting DTCP approval for constructing and promoting the apartmen....
(i) All assets owned and held by the respondents in India; The respondents are directed to specifically disclose the following assets in their affidavits:
However, we find that in the Order dated 7.04.2016, this Court had directed the Respondent No.3 to disclose the assets in an affidavit. We have no problem in recording the above submissions and we do so. There is no petition before us for clarification or modification of Order dated 07.04.2016. The only purpose for disclosing the assets was to have a fair idea for the petitioners to go for a meaningful settlement on the proposals made by Respondent No.3.
The balance of convenience is in favour of the applicant and grave prejudice and injury would be caused if the respondent does not furnish security towards the arbitral award amount in favour of the applicant. No prejudice would be caused to the respondent, if they disclose the said list of assets, subject to the payment of the award amount to the applicant herein. This Hon'ble Court has the right to call upon the respondent to disclose the assets owned by them. The applicant apprehends that since the respondent is a foreign company with no known assets in India and no oper....
In my opinion, therefore, there is sufficient power in the Court to direct the defendants to disclose the assets.” In such a case, therefore, it is the Court, which will have to direct the defendant to disclose his property so that the Court can order its attachment.
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