NCLT Bengaluru Prioritizes IBC Over Third Party Claims On Attached Assets In Liquidation

The National Company Law Tribunal (NCLT), Bengaluru bench, has ruled that liquidators must recover corporate assets even if they have been attached or seized by third parties, emphasizing that such attachments cannot override the Insolvency and Bankruptcy Code (IBC).

The NCLT held that a liquidator must assume custody and control of all assets of a corporate debtor, including those under seizure or attachment by investigating agencies or other third parties.

The tribunal further clarified that IBC provisions take precedence over other recovery mechanisms, ensuring that the liquidation estate is properly managed and the value of assets is maximized for all creditors.

[Welworth Software Private Limited v. Akshaya Kumar Karunam]