WHETHER THE APPLICATION OF IRP FOR TAKING POSSESSION OF

MUMBAI FLAT WAS JUSTIFIED?

It is submitted that the management of the affairs of the corporate debtor vests in the IRP1
and therefore, it is a duty of IRP to 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 assets that may or may not be in possession of the corporate debtor or tangible
assets, whether movable or immovable.2

In the case at hand, the IRP wrote the director to taking possession of Mumbai Flat but it
didnt receive any reply nor was the possession handed over. It was also made clear that
all the personnel connected with the Corporate Debtor are under legal obligation under
Section 19 of the Code to extend all assistance and cooperation to the IRP as required by
him in managing the affairs of Corporate Debtor. In case of any violation, the IRP would
be at liberty to take appropriate steps.3

Therefore, it can be inferred that the application of IRP for taking possession of Mumbai
Flat was reasonable.

1
Clause (a) under Section 17 of Insolvency & Bankruptcy Code, 2016
2
Sub-clause (i), (iii) of clause (f) under Section 18 of Insolvency & Bankruptcy Code, 2016
3
Reliance Commercial Finance Ltd. V. Ved Cellulose Ltd. C.P. No. (IB)- 156(PB)/2017