NCLAT Upholds Liquidation of Independent TV, Dismisses Reliance Realty Appeal

The National Company Law Appellate Tribunal (NCLAT) has dismissed Reliance Realty’s appeal to recover rent and assets from Independent TV, a former DTH company that is now under liquidation.

The tribunal agreed with the earlier Mumbai NCLT ruling, which had rejected Reliance Realty’s plea and said that Independent TV’s (formerly Reliance Big TV) liquidation should be completed quickly, following the rules of the Insolvency & Bankruptcy Code.

A two-member NCLAT bench highlighted that the liquidation process should not be disrupted or derailed by Reliance Realty, noting that the company had never raised concerns over the ownership of assets during the initial insolvency proceedings.

“We do not find any infirmity in the impugned order allowing the Liquidator to remove all moveable assets of the Corporate Debtor lying at the leased premises and in restraining the Appellant from obstructing the Liquidator and successful bidder from accessing these moveable assets,”  the NCLAT bench stated.

Background of the Case

Reliance Realty had leased part of DKAC (Dhirubhai Ambani Knowledge City) premises to Independent TV on November 27, 2017, along with pre-packaged infrastructure facilities, to run its DTH business and for storage purposes. Independent TV acquired the DTH business from Reliance Communications under a Share Purchase Agreement (SPA) executed on the same date.

Initially, Independent TV paid all service charges, including rent, electricity, and maintenance, till October 2018. However, it later defaulted on payments. On February 26, 2020, insolvency proceedings were initiated against Independent TV, and all assets were handed over to the appointed Resolution Professional in accordance with the IBC.

Liquidation Proceedings and Auction

As Independent TV failed to find a buyer during the Corporate Insolvency Resolution Process (CIRP), the NCLT directed liquidation on March 17, 2023, issuing an e-auction notice for the sale of assets. During the liquidation, Reliance Realty denied access to prospective bidders and the liquidator, demanding reimbursement of outstanding rental and electricity charges spanning five years, which temporarily restricted inspection of assets.

Eventually, Shree Sai Baba Ship Breaking Company emerged as the Successful Auction Purchaser (SAP), and a sale certificate along with a possession memo for 1,874 units of assets and inventory was handed over on December 10, 2024.

Reliance Realty’s Challenge and NCLAT Verdict

Reliance Realty later approached the NCLT seeking recovery of outstanding dues. However, the tribunal directed the company to allow the liquidator and SAP full access to the leased premises for the dismantling and removal of assets, and to refrain from obstructing the liquidation process.

Challenging this order, Reliance Realty contended before NCLAT that NCLT had wrongly allowed the liquidator to remove assets, including some allegedly owned by Reliance Communications, solely based on their presence at the premises during CIRP.

The NCLAT bench, however, rejected this argument, observing that:

• The NCLT had considered all developments during CIRP and liquidation, along with site-visit reports by the liquidator.
• The Resolution Professional had conducted a thorough verification of asset ownership while taking control of Independent TV’s property.
• Reliance Realty did not raise objections during the CIRP or after the liquidator took possession, only raising concerns after the auction process.
• Reliance Realty was not a signatory to the SPA that transferred the DTH business to Independent TV.

“If any party should have been aggrieved by the impugned order, it would have been RCom, the signatory to the SPA, which is itself under liquidation. Reliance Realty had no standing to block the liquidation,” the NCLAT ruling noted.

The ruling makes it clear that liquidation under the IBC should move forward without unnecessary delays. Third parties cannot block the liquidator or buyers once assets are lawfully in their possession. It also sends a message that leaseholders or others cannot disrupt the process, and any ownership claims must be made on time and properly documented.