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Judgment
Heard learned counsel for the appellant as well as learned counsel for the respondent.
This appeal has been filed against an order dated 12.01.2026 passed by the adjudicating authority (National Company Law Tribunal, Mumbai Bench – I) in I.A. No. 4589/2025. I.A. was filed by the appellant praying for reliefs which has been quoted in paragraph 1 of the impugned order.
Paragraph 1 of the impugned order is as follows:
“(e)this Hon'ble Tribunal be pleased to direct that the PI of the Corporate Debtor in the Oil Block is not an asset of the Corporate Debtor;
(f)this Hon'ble Tribunal be pleased to direct Respondent No. 1 to offer the PI of the Corporate Debtor to the Applicant as per Article 13 and/or any other provision of the JOA;
(g)this Hon'ble Tribunal be pleased to pass an order directing that the PI of the Corporate Debtor in the Oil Block be excluded from the Corporate Insolvency Resolution Process of the Corporate Debtor;
(h)this Hon'ble Tribunal be pleased to pass such further orders as may be required/necessary in the facts and circumstances of the present case.”
The corporate debtor has participating interest in the oil block. The appellant/applicant has also the participating interest in the oil block and there were two contracts; Production Sharing Contract and Joint Operation Contract, of which appellant and corporate debtor both were parties. The Corporate Insolvency Resolution Process (CIRP) against the corporate debtor commenced on 09.02.2023. Form-G was issued thrice. The resolution plans were received and have been approved by the Committee of Creditors (CoC) and are pending consideration before the adjudicating authority for approval. The appellant filed I.A. No. 4589/2025 praying for reliefs as noted above. The adjudicating authority by the impugned order has rejected the application, aggrieved by which order, this appeal has been filed.
Learned counsel for the appellant submitted that the Resolution Professional (RP) could not have taken control of the assets. He has referred to Section 18(1)(f) Explanation (a) of the Insolvency and Bankruptcy Code, 2016 (for short the Code or the IBC). He submits that the corporate debtor was having possession under the contractual arrangement, hence the said could not have been taken control by the RP and the participating interest ought to have been excluded from the assets of the corporate debtor. He further submits that appellant had right to ask for valuation of the participating interest and exercise his pre-emptive right with respect to participating interest. He submits that appellant has objected when Form-G was issued and asked for communicating the valuation of the corporate debtor in the participating interest.
Learned counsel appearing for the respondent refuting the submissions of the appellant submits that the RP is not taking possession of the assets what belonged to the corporate debtor is only participating interest in the oil blocks which is an intangible right and is fully covered by asset/property and is asset of the corporate debtor. It is further submitted that the present is not a case where participating rights are being transferred or sold so as to attract the provisions of Joint Operation Agreement or the clauses which has been relied by the appellant. It is submitted that the corporate debtor is being resolved under the IBC which is not akin to any transfer of the asset.
We have considered the submissions of the counsel for the parties and perused the records.
Section 18(1)(f) Explanation (a) which is relied by the appellant, provides as follows:
“18.Duties of interim resolution professional. – The interim resolution professional shall perform the following duties, namely:—
(f)take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including—
(i)assets over which the corporate debtor has ownership rights which may be located in a foreign country;
(ii)assets that may or may not be in possession of the corporate debtor;
(iii)tangible assets, whether movable or immovable;
(iv)intangible assets including intellectual property;
(v)securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies;
(vi)assets subject to the determination of ownership by a court or authority; Explanation.—For the purposes of this 1 [section], the term "assets" shall not include the following, namely:—
(a)assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;”
When we come to the facts of the present case, RP is not taking possession of oil blocks or any other asset, what is part of the asset of the corporate debtor is the participating interest in the oil block allotted by the Central Government. We thus are of the view that Section 18(1)(f) Explanation (a) does not render any assistance to the appellant to resist inclusion of the assets of the corporate debtor.
Coming to the submission that appellant has pre-emptive right to take assets and receive the valuation, present is a case where under the IBC and the Regulation, 2016, the corporate debtor is being resolved in the process of resolution, everyone including the applicant had right to participate by submission its Expression of Interest. Present is not a case where RP is transferring the assets so as to give pre-emptive right to the appellant. Relevant clauses on which reliance has been placed by the appellant has been looked into and has been considered by the adjudicating authority in the impugned order.
We are of the view that adjudicating authority after giving valid reasons has rejected the application filed by the appellant which does not warrant any interference in exercise of appellate jurisdiction by this Tribunal.
Appeal is dismissed.